Exhibit 4.1
EXECUTION COPY
INDENTURE
between
HYUNDAI AUTO RECEIVABLES TRUST 1998-A,
as Issuer
and
THE CHASE MANHATTAN BANK,
as Indenture Trustee
Dated as of April 1, 1998
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.02. Rules of Construction . . . . . . . . . . . . . . . . . . 8
Section 1.03. Incorporation by Reference of Trust Indenture Act . . . . 8
ARTICLE II
THE NOTES
Section 2.01. Form . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 2.02. Execution, Authentication and Delivery . . . . . . . . . . 10
Section 2.03. Temporary Notes . . . . . . . . . . . . . . . . . . . . . 10
Section 2.04. Registration; Registration of Transfer and Exchange . . . 11
Section 2.05. (Reserved.) . . . . . . . . . . . . . . . . . . . . . . . 12
Section 2.06. Mutilated, Destroyed, Lost or Stolen Notes . . . . . . . . 12
Section 2.07. Persons Deemed Owner . . . . . . . . . . . . . . . . . . . 13
Section 2.08. Payment of Principal and Interest; Defaulted Interest . . 13
Section 2.09. Cancellation . . . . . . . . . . . . . . . . . . . . . . . 14
Section 2.10. Book-Entry Notes . . . . . . . . . . . . . . . . . . . . . 14
Section 2.11. Notices to Clearing Agency . . . . . . . . . . . . . . . . 15
Section 2.12. Definitive Notes . . . . . . . . . . . . . . . . . . . . . 15
Section 2.13. Tax Treatment . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE III
COVENANTS
Section 3.01. Payment of Principal and Interest . . . . . . . . . . . . 17
Section 3.02. Maintenance of Office or Agency . . . . . . . . . . . . . 17
Section 3.03. Money for Payments To Be Held in Trust . . . . . . . . . . 17
Section 3.04. Existence . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 3.05. Protection of Trust Estate . . . . . . . . . . . . . . . . 19
Section 3.06. Opinions as to Trust Estate . . . . . . . . . . . . . . . 19
Section 3.07. Performance of Obligations; Servicing of Receivables . . . 20
Section 3.08. Negative Covenants . . . . . . . . . . . . . . . . . . . . 22
Section 3.09. Annual Statement as to Compliance . . . . . . . . . . . . 22
Section 3.10. Issuer May Consolidate, etc., Only on Certain Terms . . . 23
Section 3.11. Successor or Transferee . . . . . . . . . . . . . . . . . 24
Section 3.12. No Other Business . . . . . . . . . . . . . . . . . . . . 25
Section 3.13. No Borrowing . . . . . . . . . . . . . . . . . . . . . . . 25
Section 3.14. Servicer's Obligations . . . . . . . . . . . . . . . . . . 25
Section 3.15. Guarantees, Loans, Advances and Other Liabilities . . . . 25
Section 3.16. Capital Expenditures . . . . . . . . . . . . . . . . . . . 25
Section 3.17. Removal of Administrator . . . . . . . . . . . . . . . . . 25
Section 3.18. Restricted Payments . . . . . . . . . . . . . . . . . . . 25
Section 3.19. Notice of Events of Default . . . . . . . . . . . . . . . 26
Section 3.20. Further Instruments and Acts . . . . . . . . . . . . . . . 26
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction and Discharge of Indenture . . . . . . . . . 27
Section 4.02. Application of Trust Money . . . . . . . . . . . . . . . . 28
Section 4.03. Repayment of Moneys Held by Paying Agent . . . . . . . . . 28
Section 4.04. Release of Collateral . . . . . . . . . . . . . . . . . . 28
ARTICLE V
REMEDIES
Section 5.01. Events of Default . . . . . . . . . . . . . . . . . . . . 29
Section 5.02. Acceleration of Maturity; Rescission and Annulment . . . . 30
Section 5.03. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee; . . . . . . . . . . . . . . . . . . . . 32
Section 5.04. Remedies; Priorities . . . . . . . . . . . . . . . . . . . 34
Section 5.05. Optional Preservation of the Receivables . . . . . . . . . 36
Section 5.06. Limitation of Suits . . . . . . . . . . . . . . . . . . . 36
Section 5.07. Unconditional Rights of Noteholders To Receive
Principal and Interest . . . . . . . . . . . . . . . . . . 37
Section 5.08. Restoration of Rights and Remedies . . . . . . . . . . . . 37
Section 5.09. Rights and Remedies Cumulative . . . . . . . . . . . . . . 37
Section 5.10. Delay or Omission Not a Waiver . . . . . . . . . . . . . . 37
Section 5.11. Control by Noteholders . . . . . . . . . . . . . . . . . . 38
Section 5.12. Waiver of Past Defaults . . . . . . . . . . . . . . . . . 38
Section 5.13. Undertaking for Costs . . . . . . . . . . . . . . . . . . 39
Section 5.14. Waiver of Stay or Extension Laws . . . . . . . . . . . . . 39
Section 5.15. Action on Notes . . . . . . . . . . . . . . . . . . . . . 39
Section 5.16. Performance and Enforcement of Certain Obligations . . . . 39
ARTICLE VI
THE INDENTURE TRUSTEE
Section 6.01. Duties of Indenture Trustee . . . . . . . . . . . . . . . 41
Section 6.02. Rights of Indenture Trustee . . . . . . . . . . . . . . . 42
Section 6.03. Individual Rights of Indenture Trustee . . . . . . . . . . 43
Section 6.04. Indenture Trustee's Disclaimer . . . . . . . . . . . . . . 43
Section 6.05. Notice of Defaults . . . . . . . . . . . . . . . . . . . . 43
Section 6.06. Reports by Indenture Trustee to Holders . . . . . . . . . 43
Section 6.07. Compensation and Indemnity . . . . . . . . . . . . . . . . 43
Section 6.08. Replacement of Indenture Trustee . . . . . . . . . . . . . 44
Section 6.09. Successor Indenture Trustee by Merger . . . . . . . . . . 45
Section 6.10. Appointment of Co-Indenture Trustee or Separate
Indenture Trustee . . . . . . . . . . . . . . . . . . . . 46
Section 6.11. Eligibility; Disqualification . . . . . . . . . . . . . . 47
Section 6.12. Pennsylvania Motor Vehicle Sales Finance Act Licenses . . 47
Section 6.13. Preferential Collection of Claims Against Issuer . . . . . 47
Section 6.14. Waiver of Setoffs . . . . . . . . . . . . . . . . . . . . 47
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
Section 7.01. Issuer To Furnish Indenture Trustee Names and Addresses of
Noteholders . . . . . . . . . . . . . . . . . . . . . . . 48
Section 7.02. Preservation of Information; Communications to
Noteholders . . . . . . . . . . . . . . . . . . . . . . . 48
Section 7.03. Reports by Issuer . . . . . . . . . . . . . . . . . . . . 48
Section 7.04. Reports by Indenture Trustee . . . . . . . . . . . . . . . 49
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 8.01. Collection of Money . . . . . . . . . . . . . . . . . . . 50
Section 8.02. Trust Accounts . . . . . . . . . . . . . . . . . . . . . . 50
Section 8.03. General Provisions Regarding Accounts . . . . . . . . . . 51
Section 8.04. Release of Trust Estate . . . . . . . . . . . . . . . . . 52
Section 8.05. Opinion of Counsel . . . . . . . . . . . . . . . . . . . . 52
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures Without Consent of Noteholders . . 53
Section 9.02. Supplemental Indentures with Consent of Noteholders . . . 54
Section 9.03. Execution of Supplemental Indentures . . . . . . . . . . . 55
Section 9.04. Effect of Supplemental Indenture . . . . . . . . . . . . . 56
Section 9.05. Reference in Notes to Supplemental Indentures . . . . . . 56
Section 9.06. Conformity with Trust Indenture Act . . . . . . . . . . . 56
ARTICLE X
REDEMPTION OF NOTES
Section 10.01. Redemption . . . . . . . . . . . . . . . . . . . . . . . 57
Section 10.02. Form of Redemption Notice . . . . . . . . . . . . . . . . 57
Section 10.03. Notes Payable on Redemption Date . . . . . . . . . . . . 58
ARTICLE XI
MISCELLANEOUS
Section 11.01. Compliance Certificates and Opinions, etc. . . . . . . . 59
Section 11.02. Form of Documents Delivered to Indenture Trustee . . . . 60
Section 11.03. Acts of Noteholders . . . . . . . . . . . . . . . . . . . 61
Section 11.04. Notices, etc., to Indenture Trustee, Issuer and
Rating Agencies . . . . . . . . . . . . . . . . . . . 62
Section 11.05. Notices to Noteholders; Waiver . . . . . . . . . . . . . 62
Section 11.06. Alternate Payment and Notice Provisions . . . . . . . . . 63
Section 11.07. Effect of Headings and Table of Contents . . . . . . . . 63
Section 11.08. Successors and Assigns . . . . . . . . . . . . . . . . . 63
Section 11.09. Separability . . . . . . . . . . . . . . . . . . . . . . 63
Section 11.10. Benefits of Indenture . . . . . . . . . . . . . . . . . . 63
Section 11.11. Legal Holidays . . . . . . . . . . . . . . . . . . . . . 63
Section 11.12. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . 64
Section 11.13. Counterparts . . . . . . . . . . . . . . . . . . . . . . 64
Section 11.14. Recording of Indenture . . . . . . . . . . . . . . . . . 64
Section 11.15. Trust Obligation . . . . . . . . . . . . . . . . . . . . 64
Section 11.16. No Petition . . . . . . . . . . . . . . . . . . . . . . . 64
Section 11.17. Inspection . . . . . . . . . . . . . . . . . . . . . . . 65
Section 11.18. Conflict with Trust Indenture Act . . . . . . . . . . . . 65
SCHEDULE A Schedule of Receivables
EXHIBIT A-1 Form of Class A-1 Note
EXHIBIT A-2 Form of Class A-2 Note
EXHIBIT B Form of the Note Depository Agreement
THIS INDENTURE, dated as of April 1, 1998, is between HYUNDAI AUTO
RECEIVABLES TRUST 1998-A, a Delaware business trust (the "Issuer"), and THE
CHASE MANHATTAN BANK, a New York banking corporation, as trustee and not in
its individual capacity (the "Indenture Trustee").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of the Issuer's 5.90% Asset
Backed Notes, Class A-1 (the "Class A-1 Notes") and 6.05% Asset Backed Notes,
Class A-2 (the "Class A-2 Notes" and, together with the Class A-1 Notes, the
"Notes"):
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the Closing Date,
as Indenture Trustee for the benefit of the Holders of the Notes and the Note
Insurer, all of the Issuer's right, title and interest in and to (a) the
Initial Receivables listed on Schedule A and all moneys received thereon on
or after March 16, 1998, and the Subsequent Receivables listed on Schedule A
to the Subsequent Transfer Agreement and all moneys received thereon on or
after the Subsequent Cutoff Date (b) the security interests in the Financed
Vehicles and any accessions thereto granted by Obligors pursuant to the
Receivables and any other interest of the Issuer in such Financed Vehicles;
(c) any Liquidation Proceeds and any other proceeds with respect to the
Receivables from claims on any physical damage, credit life or disability
insurance policies covering Financed Vehicles or Obligors, including any
vendor's single interest or other collateral protection insurance policy;
(d) any property that shall have secured a Receivable and that shall have
been acquired by or on behalf of the Seller, the Servicer, or the Issuer; (e)
all documents and other items contained in the Receivable Files; (f) all
funds on deposit from time to time in the Trust Accounts and in all
investments and proceeds thereof (including all income thereon); (g) the
Issuer's rights and benefits, but none of its obligations, under the Sale and
Servicing Agreement (including the Issuer's right to cause the Seller, or the
Servicer, as the case may be, to repurchase Receivables from the Issuer under
the circumstances described therein); (h) any proceeds with respect to any
Receivable repurchased by a Dealer pursuant to a Dealer Agreement; (i) the
Issuer's rights and benefits under the Receivables Purchase Agreement and the
Subsequent Purchase Agreement, including the representations and warranties
and the cure and repurchase obligations of the Seller under the Receivables
Purchase Agreement; (j) all right, title and interest in all funds on deposit
from time to time in the Trust Accounts and all investments and proceeds
thereof (including all investment earnings therein); and (k) all present and
future claims, demands, causes of action and choses in action in respect of
any or all of the foregoing and all payments on or under and all proceeds of
every kind and nature whatsoever in respect of any or all of the foregoing,
including all proceeds of the conversion thereof, voluntary or involuntary,
into cash or other liquid property, all cash proceeds, accounts, accounts
receivable, notes, drafts, acceptances, chattel paper, checks, deposit
accounts, insurance proceeds, condemnation awards, rights to payment of any
and every kind and other forms of obligations and receivables, instruments
and other property that at any time constitute all or part of or are included
in the proceeds of any of the foregoing (collectively, the "Collateral").
The foregoing Grant is made in trust to secure the payment of principal
of and interest on, and any other amounts owing in respect of, the Notes,
equally and ratably without prejudice, priority or distinction, and to secure
compliance with the provisions of this Indenture, all as provided in this
Indenture.
The Indenture Trustee, on behalf of the Holders of the Notes and the
Note Insurer, acknowledges such Grant, accepts the trusts under this
Indenture in accordance with the provisions of this Indenture and agrees to
perform its duties required in this Indenture to the best of its ability to
the end that the interests of the Holders of the Notes and the Note Insurer
may be adequately and effectively protected.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions.
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(a) Definitions. Except as otherwise specified herein or as the
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context may otherwise require, the following terms have the respective
meanings set forth below for all purposes of this Indenture.
"Act" has the meaning specified in Section 11.03(a).
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"Administration Agreement" means the Administration Agreement, dated
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as of April 1, 1998, among the Administrator, the Issuer and the Indenture
Trustee.
"Administrator" means The Chase Manhattan Bank, or any successor
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Administrator under the Administration Agreement.
"Affiliate" means, with respect to any specified Person, any other
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Person controlling or controlled by or under common control with such
specified Person. For the purposes of this definition, "control" when used
with respect to any Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Authorized Officer" means, with respect to the Issuer, any officer
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of the Owner Trustee who is authorized to act for the Owner Trustee in
matters relating to the Issuer and who is identified on the list of
Authorized Officers delivered by the Owner Trustee to the Indenture Trustee
and the Note Insurer on the Closing Date (as such list may be modified or
supplemented from time to time thereafter) and, so long as the Administration
Agreement is in effect, any Vice President or more senior officer of the
Administrator who is authorized to act for the Administrator in matters
relating to the Issuer and to be acted upon by the Administrator pursuant to
the Administration Agreement and who is identified on the list of Authorized
Officers delivered by the Administrator to the Indenture Trustee and the Note
Insurer on the Closing Date (as such list may be modified or supplemented
from time to time thereafter).
"Book-Entry Notes" means a beneficial interest in the Notes,
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ownership and transfers of which shall be made through book entries by a
Clearing Agency as described in Section 2.10.
"Certificate of Trust" means the certificate of trust of the Issuer
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substantially in the form of Exhibit A to the Trust Agreement.
"Class A-1 Notes" means the 5.90% Asset Backed Notes, Class A-1,
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substantially in the form of Exhibit A-1.
"Class A-1 Rate" means 5.90% per annum, computed on the basis of a
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360-day year consisting of twelve 30-day months.
"Class A-2 Notes" means the 6.05% Asset Backed Notes, Class A-2,
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substantially in the form of Exhibit A-2.
"Class A-2 Rate" means 6.05% per annum, computed on the basis of a
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360-day year consisting of twelve 30-day months.
"Clearing Agency" means an organization registered as a "clearing
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agency" pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" means a broker, dealer, bank, other
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financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with
the Clearing Agency.
"Closing Date" means April 16, 1998.
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"Code" means the Internal Revenue Code of 1986, as amended from time
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to time, and Treasury Regulations promulgated thereunder.
"Collateral" has the meaning specified in the Granting Clause of this
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Indenture.
"Corporate Trust Office" means the principal office of the Indenture
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Trustee at which at any particular time its corporate trust business is
administered, which office at the date of execution of this Agreement is
located at The Chase Manhattan Bank, 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 (facsimile number (000) 000-0000; Attention: Structured Finance
Services, or at such other address as the Indenture Trustee may designate
from time to time by notice to the Noteholders, the Note Insurer and the
Issuer, or the principal corporate trust office of any successor Indenture
Trustee at the address designated by such successor Indenture Trustee by
notice to the Noteholders, the Note Insurer and the Issuer.
"Default" means any occurrence that is, or with notice or the lapse
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of time or both would become, an Event of Default.
"Definitive Notes" has the meaning specified in Section 2.10.
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"Event of Default" has the meaning specified in Section 5.01.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended.
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"Executive Officer" means, with respect to any corporation, the Chief
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Executive Officer, Chief Operating Officer, Chief Financial Officer,
President, Executive Vice President, any Vice President, the Secretary or the
Treasurer of such corporation; and with respect to any partnership, any
general partner thereof.
"Grant" means mortgage, pledge, bargain, sell, warrant, alienate,
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remise, release, convey, assign, transfer, create, and xxxxx x xxxx upon and
a security interest in and a right of set-off against, deposit, set over and
confirm pursuant to this Indenture. A Grant of the Collateral or of any
other agreement or instrument shall include all rights, powers and options
(but none of the obligations) of the granting party thereunder, including the
immediate and continuing right to claim for, collect, receive and give
receipt for principal and interest payments in respect of the Collateral and
all other moneys payable thereunder, to give and receive notices and other
communications, to make waivers or other agreements, to exercise all rights
and options, to bring Proceedings in the name of the granting party or
otherwise, and generally to do and receive anything that the granting party
is or may be entitled to do or receive thereunder or with respect thereto.
"HMFC" means Hyundai Motor Finance Company, a California corporation,
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and its successors.
"Holder" or "Noteholder" means (a) a Person in whose name a Note is
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registered on the Note Register or (b) if the Note Insurer has made a payment
under the Policy, the Note Insurer to the extent provided in Section 2.08(c)
of this Indenture and the proviso to the definition of "Outstanding".
"Indenture Trustee" means The Chase Manhattan Bank, a New York
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banking corporation, not in its individual capacity, but as Indenture Trustee
under this Indenture, or any successor Indenture Trustee under this
Indenture.
"Independent" means, when used with respect to any specified Person,
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that such Person (a) is in fact independent of the Issuer, any other obligor
on the Notes, the Seller and any Affiliate of any of the foregoing Persons,
(b) does not have any direct financial interest or any material indirect
financial interest in the Issuer, any such other obligor, the Seller or any
Affiliate of any of the foregoing Persons and (c) is not connected with the
Issuer, any such other obligor, the Seller or any Affiliate of any of the
foregoing Persons as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions.
"Independent Certificate" means a certificate or opinion to be
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delivered to the Indenture Trustee and the Note Insurer under the
circumstances described in, and otherwise complying with, the applicable
requirements of Section 11.01, made by an Independent appraiser or other
expert appointed by an Issuer Order and approved by the Indenture Trustee and
the Note Insurer in the exercise of reasonable care, and such opinion or
certificate shall state that the signer has read the definition of
"Independent" in this Indenture and that the signer is Independent within the
meaning thereof.
"Interest Rate" means the Class A-1 Rate or the Class A-2 Rate, as
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the context may require.
"Issuer" means Hyundai Auto Receivables Trust 1998-A until a
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successor replaces it and, thereafter, means the successor and, for purposes
of any provision contained herein and required by the TIA, each other obligor
on the Notes.
"Issuer Order" or "Issuer Request" means a written order or request
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signed in the name of the Issuer by any one of its Authorized Officers and
delivered to the Indenture Trustee.
"Note" means a Class A-1 Note or a Class A-2 Note, as the context may
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require.
"Note Depository Agreement" means the agreement dated April 16, 1998,
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among the Issuer, the Administrator, the Indenture Trustee and The Depository
Trust Company, as the initial Clearing Agency, relating to the Class A-1
Notes and the Class A-2 Notes, substantially in the form of Exhibit B.
"Note Owner" means, with respect to a Book-Entry Note, the Person who
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is the beneficial owner of such Book-Entry Note, as reflected on the books of
the Clearing Agency or on the books of a Person maintaining an account with
such Clearing Agency (directly as a Clearing Agency Participant or as an
indirect participant, in each case in accordance with the rules of such
Clearing Agency).
"Note Register" and "Note Registrar" have the respective meanings
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specified in Section 2.04.
"Officer's Certificate" means a certificate signed by any Authorized
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Officer of the Issuer, under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.01, and delivered
to the Indenture Trustee and the Note Insurer. Unless otherwise specified,
any reference in this Indenture to an Officer's Certificate shall be to an
Officer's Certificate of any Authorized Officer of the Issuer.
"Opinion of Counsel" means one or more written opinions of counsel
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who may, except as otherwise expressly provided in this Indenture, be an
employee of or counsel to the Issuer and who shall be satisfactory to the
Indenture Trustee and to the Note Insurer, and which opinion or opinions
shall be addressed to the Indenture Trustee and the Note Insurer, shall
comply with any applicable requirements of Section 11.01 and shall be in form
and substance satisfactory to the Indenture Trustee and to the Note Insurer.
"Outstanding" means, as of any date of determination, all Notes
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theretofore authenticated and delivered under this Indenture except:
(i) Notes theretofore cancelled by the Note Registrar or delivered
to the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with the Indenture
Trustee or any Paying Agent in trust for the Holders of such Notes
(provided, however, that if such Notes are to be redeemed, notice of
such redemption has been duly given pursuant to this Indenture or
provision for such notice has been made, satisfactory to the Indenture
Trustee); and
(iii) Notes in exchange for or in lieu of which other Notes
have been authenticated and delivered pursuant to this Indenture unless
proof satisfactory to the Indenture Trustee is presented that any such
Notes are held by a bona fide purchaser;
provided, however, that Notes that have been paid with proceeds of the Policy
shall continue to remain Outstanding for purposes of this Indenture until the
Note Insurer has been paid as subrogee hereunder or reimbursed pursuant to
the Insurance Agreement, as evidenced by a written notice from the Note
Insurer delivered to the Indenture Trustee, and the Note Insurer shall be
deemed to be the Holder of such Notes to the extent of any payments made
thereon by the Note Insurer; provided further, that in determining whether
the Holders of the requisite Outstanding Amount of the Notes have given any
request, demand, authorization, direction, notice, consent or waiver
hereunder or under any Basic Document, Notes owned by the Issuer, any other
obligor on the Notes, the Seller or any Affiliate of any of the foregoing
Persons shall be disregarded and deemed not to be Outstanding, except that,
in determining whether the Indenture Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Notes that the Indenture Trustee knows to be so owned shall be
so disregarded. Notes so owned that have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
Indenture Trustee the pledgee's right so to act with respect to such Notes
and that the pledgee is not the Issuer, any other obligor on the Notes, the
Seller or any Affiliate of any of the foregoing Persons.
"Outstanding Amount" means, as of any date of determination and as to
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any Notes, the aggregate principal amount of such Notes Outstanding as of
such date of determination.
"Owner Trustee" means Wilmington Trust Company, not in its individual
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capacity but solely as Owner Trustee under the Trust Agreement, or any
successor Owner Trustee under the Trust Agreement.
"Paying Agent" means the Indenture Trustee or any other Person that
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is acceptable to the Note Insurer and meets the eligibility standards for the
Indenture Trustee specified in Section 6.11 and is authorized by the Issuer
to make payments to and distributions from the Collection Account, the Note
Distribution Account, the Pre-Funding Account, the Capitalized Interest
Account, the Reserve Account and the Yield Maintenance Account, including
payments of principal of or interest on the Notes on behalf of the Issuer.
"Payment Date" means a Distribution Date.
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"Person" means any individual, corporation, estate, partnership,
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limited liability company, joint venture, association, joint stock company,
trust or business trust (including any beneficiary thereof), unincorporated
organization or government or any agency or political subdivision thereof.
"Predecessor Note" means, with respect to any particular Note, every
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previous Note evidencing all or a portion of the same debt as that evidenced
by such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.06 in lieu of a mutilated, lost,
destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.
"Proceeding" means any suit in equity, action at law or other
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judicial or administrative proceeding.
"Record Date" means, with respect to a Distribution Date or
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Redemption Date, the close of business on the day immediately preceding such
Distribution Date or Redemption Date.
"Redemption Date" means, as the context requires, (a) in the case of
---------------
a redemption of the Notes pursuant to Section 10.01(a), the Distribution Date
specified by the Servicer or the Issuer pursuant to Section 10.01(a) or (b)
in the case of a redemption of Notes pursuant to Section 10.01(c), the
Distribution Date on which the Indenture Trustee shall withdraw the remaining
Pre-Funded Amount and deposit the applicable amount thereof payable to any
Class of Notes into the Note Distribution Account as specified in
Section 5.14(b) of the Sale and Servicing Agreement .
"Redemption Price" means in the case of a redemption of the Notes
----------------
pursuant to Section 10.01(a), an amount equal to the unpaid principal amount
of the Notes redeemed plus accrued and unpaid interest thereon at the Class
A-2 Rate for each Note being so redeemed to but excluding the Redemption
Date.
"Registered Holder" means the Person in whose name a Note is
-----------------
registered on the Note Register on the applicable Record Date.
"Responsible Officer" means, with respect to the Indenture Trustee,
-------------------
any officer within the Corporate Trust Office of the Indenture Trustee,
including any Vice President, Assistant Vice President, Assistant Treasurer,
Assistant Secretary or any other officer of the Indenture Trustee customarily
performing functions similar to those performed by any of the above
designated officers and also, with respect to a particular matter, any other
officer to whom such matter is referred because of such officer's knowledge
of and familiarity with the particular subject.
"Sale and Servicing Agreement" means the Sale and Servicing
----------------------------
Agreement, dated as of April 1, 1998, among the Issuer, the Depositor, the
Seller, the Servicer and the Indenture Trustee, as Backup Servicer,
Custodian, Administrator and Indenture Trustee.
"Schedule of Receivables" means the list of Receivables set forth in
-----------------------
Schedule A (which Schedule may be in the form of microfiche), as supplemented
as of the Subsequent Transfer Date by the Subsequent Receivables listed on
Schedule A to the Subsequent Transfer Agreement.
"Securities Act" means the Securities Act of 1933, as amended.
--------------
"Seller" means HMFC, in its capacity as seller under the Receivables
------
Purchase Agreement and the Sale and Servicing Agreement and its successors in
interest.
"Servicer" means HMFC, in its capacity as servicer under the Sale and
--------
Servicing Agreement, and any Successor Servicer thereunder.
"State" means any one of the 00 xxxxxx xx xxx Xxxxxx Xxxxxx of
-----
America, or the District of Columbia.
"Successor Servicer" has the meaning specified in Section 3.07(e).
------------------
"Trust Estate" means all money, instruments, rights
------------
and other property that are subject or intended to be subject to the lien and
security interest of this Indenture for the benefit of the Noteholders and the
Note Insurer (including, without limitation, all property and interests Granted
to the Indenture Trustee), including all proceeds thereof.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939
------------------- ---
as in force on the date hereof, unless otherwise specifically provided.
"UCC" means, unless the context otherwise requires, the Uniform
---
Commercial Code as in effect in the relevant jurisdiction, as amended from
time to time.
(b) Except as otherwise specified herein or as the context may
otherwise require, capitalized terms used herein but not otherwise defined
shall have the meanings ascribed thereto in the Sale and Servicing Agreement.
Section 1.02. Rules of Construction. Unless the context otherwise
---------------------
requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
(v) definitions are applicable to the singular and plural forms of
such terms and to the masculine, feminine and neuter genders of such
terms; and
(vi) any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection
herewith means such agreement, instrument or statute as from time to
time amended, modified or supplemented and includes (in the case of
agreements or instruments) references to all attachments thereto and
instruments incorporated therein; references to a Person are also to its
permitted successors and assigns.
Section 1.03. Incorporation by Reference of Trust Indenture Act.
-------------------------------------------------
Whenever this Indenture refers to a provision of the TIA, such provision is
incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Indenture
Trustee.
"obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule
have the meaning assigned to them by such definitions.
ARTICLE II
THE NOTES
Section 2.01. Form. The Class A-1 Notes and the Class A-2 Notes, in
----
each case together with the Indenture Trustee's certificate of
authentication, shall be in substantially the form set forth in Exhibit A-1
and Exhibit A-2, respectively, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may,
consistently herewith, be determined by the officers executing the Notes, as
evidenced by their execution of the Notes. Any portion of the text of any
Note may be set forth on the reverse thereof, with an appropriate reference
thereto on the face of such Note.
The Definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods (with or without
steel engraved borders), all as determined by the officers executing such
Notes, as evidenced by their execution of such Notes.
Each Note shall be dated the date of its authentication. The terms of
the Notes set forth in Exhibit A-1 and Exhibit A-2 are part of the terms of
this Indenture.
Section 2.02. Execution, Authentication and Delivery. The Notes
--------------------------------------
shall be executed on behalf of the Issuer by any of its Authorized Officers.
The signature of any such Authorized Officer on the Notes may be manual or
facsimile.
Notes bearing the manual or facsimile signature of individuals who were
at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not
hold such offices at the date of such Notes.
The Indenture Trustee shall upon Issuer Order authenticate and deliver
Class A-1 Notes for original issue in an aggregate principal amount of
$220,000,000 and Class A-2 Notes for original issue in an aggregate principal
amount of $80,150,000. The aggregate principal amount of Class A-1 Notes and
Class A-2 Notes outstanding at any time may not exceed such respective
amounts except as provided in Section 2.06.
Each Note shall be dated the date of its authentication. The Notes
shall be issuable as registered Notes in minimum denominations of $1,000 and
in integral multiples of $1,000 in excess thereof.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Note shall be
conclusive evidence, and the only evidence, that such Note has been duly
authenticated and delivered hereunder.
Section 2.03. Temporary Notes. Pending the preparation of
---------------
Definitive Notes, the Issuer may execute, and upon receipt of an Issuer Order
the Indenture Trustee shall authenticate and deliver, temporary Notes that
are printed, lithographed, typewritten, mimeographed or otherwise produced,
of the tenor of the Definitive Notes in lieu of which they are issued and
with such variations not inconsistent with the terms of this Indenture as the
officers executing such Notes may determine, as evidenced by their execution
of such Notes.
If temporary Notes are issued, the Issuer shall cause Definitive Notes
to be prepared without unreasonable delay. After the preparation of
Definitive Notes, the temporary Notes shall be exchangeable for Definitive
Notes upon surrender of the temporary Notes at the office or agency of the
Issuer to be maintained as provided in Section 3.02, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Notes,
the Issuer shall execute, and the Indenture Trustee shall authenticate and
deliver in exchange therefor, a like principal amount of Definitive Notes of
authorized denominations. Until so exchanged, the temporary Notes shall in
all respects be entitled to the same benefits under this Indenture as
Definitive Notes.
Section 2.04. Registration; Registration of Transfer and Exchange.
---------------------------------------------------
The Issuer shall cause to be kept a register (the "Note Register") in which,
subject to such reasonable regulations as it may prescribe and the
restrictions on transfers of the Notes set forth herein, the Note Registrar
shall provide for the registration of Notes and the registration of transfers
of Notes. The Indenture Trustee initially shall be the "Note Registrar" for
the purpose of registering Notes and transfers of Notes as herein provided.
Upon any resignation of any Note Registrar, the Issuer shall promptly appoint
a successor or, if it elects not to make such an appointment, assume the
duties of Note Registrar.
If a Person other than the Indenture Trustee is appointed by the Issuer
as Note Registrar, the Issuer will give the Indenture Trustee and the Note
Insurer prompt written notice of the appointment of such Note Registrar and
of the location, and any change in the location, of the Note Register, and
the Indenture Trustee and the Note Insurer shall have the right to inspect
the Note Register at all reasonable times and to obtain copies thereof, and
the Indenture Trustee and the Note Insurer shall have the right to
conclusively rely upon a certificate executed on behalf of the Note Registrar
by an Executive Officer thereof as to the names and addresses of the Holders
of the Notes and the principal amounts and number of such Notes.
Upon surrender for registration of transfer of any Note at the office or
agency of the Issuer to be maintained as provided in Section 3.02, if the
requirements of Section 8-401(1) of the UCC are met, the Issuer shall
execute, and the Indenture Trustee shall authenticate and the Noteholder
shall obtain from the Indenture Trustee, in the name of the designated
transferee or transferees, one or more new Notes of the same Class in any
authorized denominations, of a like aggregate principal amount.
At the option of the Holder, Notes may be exchanged for other Notes of
the same Class in any authorized denominations, of a like aggregate principal
amount, upon surrender of the Notes to be exchanged at such office or agency.
Whenever any Notes are so surrendered for exchange, if the requirements of
Section 8-401(1) of the UCC are met, the Issuer shall execute, and the
Indenture Trustee, without having to verify that the requirements of 8-401(1)
have been met, shall authenticate and the Noteholder shall obtain from the
Indenture Trustee, the Notes that the Noteholder making the exchange is
entitled to receive.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Issuer, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed by, or be accompanied by a written instrument
of transfer in form satisfactory to the Indenture Trustee duly executed by,
the Holder thereof or such Holder's attorney duly authorized in writing, with
such signature guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in the Securities Transfer Agent's Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Exchange Act.
No service charge shall be made to a Holder or the Note Insurer for any
registration of transfer or exchange of Notes, but the Issuer may require
payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any registration of transfer or
exchange of Notes, other than exchanges pursuant to Section 2.03, 2.08(c) or
9.05 not involving any transfer.
The preceding provisions of this Section notwithstanding, the Issuer
shall not be required to make and the Note Registrar need not register
transfers or exchanges of Notes selected for redemption or of any Note for a
period of 15 days preceding the due date for any payment with respect to the
Note.
Section 2.05. (Reserved.)
-----------
Section 2.06. Mutilated, Destroyed, Lost or Stolen Notes. If
------------------------------------------
(i) any mutilated Note is surrendered to the Indenture Trustee, or the
Indenture Trustee receives evidence to its satisfaction of the destruction,
loss or theft of any Note, and (ii) there is delivered to the Indenture
Trustee and the Note Insurer such security or indemnity as may be required by
it to hold the Issuer and the Indenture Trustee and the Note Insurer
harmless, then, in the absence of notice to the Issuer, the Note Registrar or
the Indenture Trustee that such Note has been acquired by a bona fide
purchaser, and provided that the requirements of Section 8-405 of the UCC are
met, the Issuer shall execute, and upon an Issuer Order the Indenture Trustee
shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Note, a replacement Note of the same
Class; provided, however, that if any such destroyed, lost or stolen Note,
but not a mutilated Note, shall have become or within seven days shall be due
and payable, or shall have been called for redemption, instead of issuing a
replacement Note, the Issuer may pay such destroyed, lost or stolen Note when
so due or payable or upon the Redemption Date without surrender thereof. If,
after the delivery of such replacement Note or payment of a destroyed, lost
or stolen Note, a bona fide purchaser of the original Note in lieu of which
such replacement Note was issued presents for payment such original Note, the
Issuer and the Indenture Trustee and the Note Insurer shall be entitled to
recover such replacement Note (or such payment) from the Person to whom it
was delivered or any Person taking such replacement Note from such Person to
whom such replacement Note was delivered or any assignee of such Person,
except a bona fide purchaser, and shall be entitled to recover upon the
security or indemnity provided therefor to the extent of any loss, damage,
cost or expense incurred by the Issuer, the Note Insurer or the Indenture
Trustee in connection therewith.
Upon the issuance of any replacement Note under this Section, the Issuer
may require the payment by the Holder of such Note of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the fees and expenses of
the Indenture Trustee) connected therewith.
Every replacement Note issued pursuant to this Section in replacement of
any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Note shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally
and proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
Section 2.07. Persons Deemed Owners. Prior to due presentment for
---------------------
registration of transfer of any Note, the Issuer, the Indenture Trustee, the
Note Insurer and any agent of the Issuer, the Indenture Trustee or the Note
Insurer may treat the Person in whose name any Note is registered (as of the
day of determination) as the owner of such Note for the purpose of receiving
payments of principal of and interest, if any, on such Note and for all other
purposes whatsoever, whether or not such Note be overdue, and none of the
Issuer, the Indenture Trustee, the Note Insurer or any agent of the Issuer,
the Indenture Trustee or the Note Insurer shall be affected by notice to the
contrary.
Section 2.08. Payment of Principal and Interest; Defaulted Interest.
-----------------------------------------------------
(a) The Class A-1 Notes and the Class A-2 Notes shall accrue interest
at the Class A-1 Rate and the Class A-2 Rate, respectively, as set forth in
Exhibits A-1 and A-2, respectively, and such interest shall be payable on
each Distribution Date as specified therein, subject to Section 3.01. Any
installment of interest or principal payable on a Note that is punctually
paid or duly provided for by the Issuer on the applicable Distribution Date
shall be paid to the Person in whose name such Note (or one or more
Predecessor Notes) is registered on the Record Date by check mailed
first-class postage prepaid to such Person's address as it appears on the
Note Register on such Record Date, except that, unless Definitive Notes have
been issued pursuant to Section 2.12, with respect to Notes registered on the
Record Date in the name of the nominee of the Clearing Agency (initially,
such nominee to be Cede & Co.), payment shall be made by wire transfer in
immediately available funds to the account designated by such nominee;
provided, however, that the final installment of principal payable with
respect to such Note on a Distribution Date or on the related Final Scheduled
Distribution Date (including the Redemption Price for any Note called for
redemption pursuant to Section 10.01) shall be payable as provided in
paragraph (b) below. The funds represented by any such checks returned
undelivered shall be held in accordance with Section 3.03.
(b) The principal of each Note shall be payable in installments on each
Distribution Date as provided in the forms of the Notes set forth in Exhibit
A-1 and A-2. Notwithstanding the foregoing, the entire unpaid principal
amount of the Notes may be declared immediately due and payable, if not
previously paid, in the manner provided in Section 5.02 on the date on which
an Event of Default shall have occurred by the Indenture Trustee or Holders
of Notes representing not less than a majority of the Outstanding Amount;
provided, however, that if on the date any such Event of Default occurs the
Note Insurer is the Controlling Party, the Note Insurer, in its sole
discretion, may determine whether or not to accelerate payments on the Notes.
All principal payments on each Class of Notes shall be made pro rata to the
Noteholders of each Class entitled thereto. Upon written notice thereof, the
Indenture Trustee shall notify the Person in whose name a Note is registered
at the close of business on the Record Date preceding the Distribution Date
on which the Issuer expects the final installment of principal of and
interest on such Note to be paid. Such notice shall specify that such final
installment will be payable only upon presentation and surrender of such Note
and shall specify the place where such Note may be presented and surrendered
for payment of such installment. Notices in connection with redemptions of
Notes shall be mailed to Noteholders as provided in Section 10.02.
(c) Promptly following the date on which all principal of and interest
on the Notes has been paid in full and the Notes have been surrendered to the
Indenture Trustee, the Indenture Trustee shall, if the Note Insurer has paid
any amount in respect of the Notes under the Policy that has not been
reimbursed to the Note Insurer, deliver such surrendered Notes to the Note
Insurer.
(d) If the Issuer defaults in a payment of interest on the Notes, the
Issuer shall pay defaulted interest (plus interest on such defaulted interest
to the extent lawful) at the applicable Interest Rate in any lawful manner on
the next Distribution Date.
Section 2.09. Cancellation. Subject to Section 2.08(c), all Notes
------------
surrendered for payment, registration of transfer, exchange or redemption
shall, if surrendered to any Person other than the Indenture Trustee, be
delivered to the Indenture Trustee and shall be promptly cancelled by the
Indenture Trustee. Subject to Section 2.08(c), the Issuer may at any time
deliver to the Indenture Trustee for cancellation any Notes previously
authenticated and delivered hereunder that the Issuer may have acquired in
any manner whatsoever, and all Notes so delivered shall be promptly cancelled
by the Indenture Trustee. No Notes shall be authenticated in lieu of or in
exchange for any Notes cancelled as provided in this Section, except as
expressly permitted by this Indenture. Subject to Section 2.08(c), all
cancelled Notes may be held or disposed of by the Indenture Trustee in
accordance with its standard retention or disposal policy as in effect at the
time unless the Issuer shall direct by an Issuer Order that they be destroyed
or returned to it; provided, that such Issuer Order is timely and the Notes
have not been previously disposed of by the Indenture Trustee.
Section 2.10. Book-Entry Notes. The Notes, upon original issuance,
----------------
will be issued in the form of typewritten Notes representing the Book-Entry
Notes, to be delivered to The Depository Trust Company, the initial Clearing
Agency, by, or on behalf of, the Issuer. The Book-Entry Notes shall be
registered initially on the Note Register in the name of Cede & Co., the
nominee of the initial Clearing Agency, and no Owner thereof will receive a
Definitive Note representing such Note Owner's interest in such Note, except
as provided in Section 2.12. Unless and until definitive, fully registered
Notes (the "Definitive Notes") have been issued to such Note Owners pursuant
to Section 2.12:
(i) the provisions of this Section shall be in full force and
effect;
(ii) the Note Registrar and the Indenture Trustee shall be entitled
to deal with the Clearing Agency for all purposes of this Indenture
(including the payment of principal of and interest on the Notes and the
giving of instructions or directions hereunder) as the sole holder of
the Notes, and shall have no obligation to the Note Owners;
(iii) to the extent that the provisions of this Section
conflict with any other provisions of this Indenture, the provisions of
this Section shall control;
(iv) the rights of Note Owners shall be exercised only through the
Clearing Agency and shall be limited to those established by law and
agreements between such Note Owners and the Clearing Agency or the
Clearing Agency Participants pursuant to the Note Depository Agreement.
Unless and until Definitive Notes are issued pursuant to Section 2.12,
the initial Clearing Agency will make book-entry transfers among the
Clearing Agency Participants and receive and transmit payments of
principal of and interest on the Notes to such Clearing Agency
Participants; and
(v) whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of Holders of Notes
evidencing a specified percentage of the Outstanding Amount of the
Notes, the Clearing Agency shall be deemed to represent such percentage
only to the extent that it has received instructions to such effect from
Note Owners or Clearing Agency Participants owning or representing,
respectively, such required percentage of the beneficial interest in the
Notes and has delivered such instructions to the Indenture Trustee.
Section 2.11. Notices to Clearing Agency. Whenever a notice or
--------------------------
other communication to the Noteholders is required under this Indenture,
unless and until Definitive Notes shall have been issued to such Note Owners
pursuant to Section 2.12, the Indenture Trustee shall give all such notices
and communications specified herein to be given to Holders of the Notes to
the Clearing Agency, and shall have no obligation to such Note Owners.
Section 2.12. Definitive Notes. If (i) the Administrator advises
----------------
the Indenture Trustee in writing that the Clearing Agency is no longer
willing or able to properly discharge its responsibilities with respect to
the Book-Entry Notes and the Administrator is unable to locate a qualified
successor or (ii) after the occurrence of an Event of Default or a Servicer
Termination Event, Owners of the Book-Entry Notes representing beneficial
interests aggregating at least a majority of the Outstanding Amount of such
Notes advise the Clearing Agency in writing that the continuation of a
book-entry system through the Clearing Agency is no longer in the best
interests of such Note Owners, then the Clearing Agency shall notify all Note
Owners, the Administrator and the Indenture Trustee of the occurrence of any
such event and of the availability of Definitive Notes to Note Owners
requesting the same. Upon surrender to the Indenture Trustee of the
typewritten Notes representing the Book-Entry Notes by the Clearing Agency,
accompanied by registration instructions, the Issuer shall execute and the
Indenture Trustee upon an Issuer Order shall authenticate the Definitive
Notes in accordance with the written instructions of the Clearing Agency.
None of the Issuer, the Note Insurer, the Note Registrar, the Administrator
or the Indenture Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying
on, such instructions. Upon the issuance of Definitive Notes, the Indenture
Trustee shall recognize the Holders of the Definitive Notes as Noteholders.
Section 2.13. Tax Treatment. The Issuer has entered into this
-------------
Indenture, and the Notes will be issued, with the intention that, for
federal, state and local income, single business and franchise tax purposes,
the Notes will qualify as indebtedness of the Issuer secured by the Trust
Estate. The Issuer, by entering into this Indenture, and each Noteholder, by
its acceptance of a Note (and each Note Owner by its acceptance of an
interest in the applicable Book-Entry Note), agree to treat the Notes for
federal, state and local income and franchise tax purposes as indebtedness.
ARTICLE III
COVENANTS
Section 3.01. Payment of Principal and Interest. The Issuer will
---------------------------------
duly and punctually pay the principal, if any, of and the interest, if any,
on the Notes in accordance with the terms of the Notes and this Indenture.
Without limiting the foregoing, subject to Section 8.02(c), on each
Distribution Date, the Issuer shall cause to be distributed all amounts
deposited pursuant to the Sale and Servicing Agreement into the Note
Distribution Account for the benefit of the Notes to the related Noteholders.
Amounts properly withheld under the Code by any Person from a payment to any
Noteholder of interest or principal shall be considered as having been paid
by the Issuer to such Noteholder for all purposes of this Indenture.
Section 3.02. Maintenance of Office or Agency. The Issuer will
-------------------------------
maintain in the Borough of Manhattan, The City of New York, an office or
agency where Notes may be surrendered for registration of transfer or exchange,
and where notices and demands to or upon the Issuer in respect of
the Notes and this Indenture may be served. Such office will initially be
located at 000 Xxxx 00xx Xxxxxx, 0xx floor, Attention: Structure Finance
Operations, Xxx Xxxx, Xxx Xxxx 00000. The Issuer will give prompt written
notice to the Indenture Trustee and the Note Insurer of the location, and of
any change in the location, of any such office or agency. If at any time the
Issuer shall fail to maintain any such office or agency or shall fail to
furnish the Indenture Trustee with the address thereof, such surrenders,
notices and demands may be made or served at the Corporate Trust Office, and
the Issuer hereby appoints the Indenture Trustee as its agent to receive all
such surrenders, notices and demands.
Section 3.03. Money for Payments To Be Held in Trust. All payments
--------------------------------------
of amounts due and payable with respect to any Notes that are to be made from
amounts withdrawn from the Collection Account, the Note Distribution Account,
the Pre-Funding Account, the Reserve Account, the Capitalized Interest
Account and the Yield Maintenance Account shall be made on behalf of the
Issuer by the Indenture Trustee or by another Paying Agent, and no amounts so
withdrawn from the Collection Account, the Note Distribution Account, the
Pre-Funding Account, the Capitalized Interest Account, the Reserve Account or
the Yield Maintenance Account for payments of Notes shall be paid over to the
Issuer except as provided in this Section.
On each Distribution Date and Redemption Date, the Issuer shall deposit
or cause to be deposited into the Note Distribution Account an aggregate sum
sufficient to pay the amounts then becoming due under the Notes, such sum to
be held in trust for the benefit of the Persons entitled thereto, and (unless
the Paying Agent is the Indenture Trustee) shall promptly notify the
Indenture Trustee and the Note Insurer in writing of its action or failure so
to act.
The Issuer will cause each Paying Agent other than the Indenture Trustee
to execute and deliver to the Indenture Trustee and the Note Insurer an
instrument in which such Paying Agent shall agree with the Indenture Trustee
(and if the Indenture Trustee acts as Paying Agent, it hereby so agrees),
subject to the provisions of this Section, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and pay such sums to such Persons as
herein provided;
(ii) give the Indenture Trustee and the Note Insurer notice of
any default by the Issuer (or any other obligor on the Notes) of which
it has actual knowledge in the making of any payment required to be made
with respect to the Notes;
(iii) at any time during the continuance of any such default, upon
the written request of the Indenture Trustee, forthwith pay to the
Indenture Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to
the Indenture Trustee all sums held by it in trust for the payment of
Notes if at any time it ceases to meet the standards required to be met
by a Paying Agent at the time of its appointment; and
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed thereon and with respect to any applicable
reporting requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by
Issuer Order direct any Paying Agent to pay to the Indenture Trustee all sum
sheld in trust by such Paying Agent, such sums to be held by the Indenture
Trustee upon the same trusts as those upon which the sums were held by such
Paying Agent; and upon such payment by any Paying Agent to the Indenture
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Subject to applicable laws with respect to escheat of funds, any money
held by the Indenture Trustee or any Paying Agent in trust for the payment of
any amount due with respect to any Note and remaining unclaimed for two years
after such amount has become due and payable shall be discharged from such
trust and be paid either (i) upon Issuer Request and with the consent of the
Note Insurer (if the Note Insurer is at any such time the Controlling Party)
to the Issuer or (ii) if such money or any portion thereof was paid by the
Note Insurer to the Indenture Trustee for the payment of principal of or
interest on such Note to the extent of such unreimbursed amounts, to the Note
Insurer in lieu of the Issuer; and the Holder of such Note shall thereafter,
as an unsecured general creditor, look only to the Issuer for payment thereof
(but only to the extent of the amounts so paid to the Issuer), and all
liability of the Indenture Trustee or such Paying Agent with respect to such
trust money shall thereupon cease; provided, however, that the Indenture
Trustee or such Paying Agent, before being required to make any such
repayment, shall at the expense and direction of the Issuer cause to be
published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in The City of
New York, notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication, any unclaimed balance of such money then remaining will be
repaid to the Issuer or the Note Insurer, as applicable. The Indenture
Trustee shall also adopt and employ, at the expense and direction of the
Issuer, any other reasonable means of notification of such repayment
(including, but not limited to, mailing notice of such repayment to Holders
whose Notes have been called but have not been surrendered for redemption or
whose right to or interest in moneys due and payable but not claimed is
determinable from the records of the Indenture Trustee or of any Paying
Agent, at the last address of record for each such Holder).
Section 3.04. Existence. The Issuer will keep in full effect its
---------
existence, rights and franchises as a business trust under the laws of the
State of Delaware (unless subject to the prior written consent of the Note
Insurer it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other State or of the United States of
America, in which case the Issuer will keep in full effect its existence,
rights and franchises under the laws of such other jurisdiction) and will
obtain and preserve its qualification to do business in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Collateral and each other
instrument or agreement included in the Trust Estate.
Section 3.05. Protection of Trust Estate. The Issuer will from time
--------------------------
to time execute and deliver all such supplements and amendments hereto and
all such financing statements, continuation statements, instruments of
further assurance and other instruments, and will take such other action
necessary or advisable to:
(i) maintain or preserve the lien and security interest (and the
priority thereof) of this Indenture or carry out more effectively the
purposes hereof;
(ii) perfect, publish notice of or protect the validity of any
Grant made or to be made by this Indenture;
(iii) enforce any of the Collateral; or
(iv) preserve and defend title to the Trust Estate and the rights
of the Indenture Trustee, the Note Insurer and the Noteholders in such
Trust Estate against the claims of all persons and parties.
The Issuer hereby designates the Indenture Trustee, as its agent and
attorney-in-fact, to execute upon an Issuer Order any financing statement,
continuation statement or other instrument required to be executed pursuant
to this Section 3.05.
Section 3.06. Opinions as to Trust Estate.
---------------------------
(a) On the Closing Date, the Issuer shall cause to be furnished to the
Indenture Trustee and the Note Insurer an Opinion of Counsel either stating
that, in the opinion of such counsel, such action has been taken with respect
to the recording and filing of this Indenture, any indentures supplemental
hereto, and any other requisite documents, and with respect to the execution
and filing of any financing statements and continuation statements, as are
necessary to perfect and make effective the lien and security interest of
this Indenture and reciting the details of such action, or stating that, in
the opinion of such counsel, no such action is necessary to make such lien
and security interest effective.
(b) On or before September 30, in each calendar year, beginning in
1998, the Issuer shall furnish to the Indenture Trustee, the Rating Agencies
and the Note Insurer an Opinion of Counsel either stating that, in the
opinion of such counsel, such action has been taken with respect to the
recording, filing, re-recording and refiling of this Indenture, any
indentures supplemental hereto and any other requisite documents and with
respect to the execution and filing of any financing statements and
continuation statements as is necessary to maintain the lien and security
interest created by this Indenture and reciting the details of such action,
or stating that in the opinion of such counsel no such action is necessary to
maintain such lien and security interest. Such Opinion of Counsel shall also
describe the recording, filing, re-recording and refiling of this Indenture,
any indentures supplemental hereto and any other requisite documents and the
execution and filing of any financing statements and continuation statements
that will, in the opinion of such counsel, be required to maintain the lien
and security interest of this Indenture until September 30 in the following
calendar year.
Section 3.07. Performance of Obligations; Servicing of Receivables.
----------------------------------------------------
(a) The Issuer will not take any action and will use its best efforts
not to permit any action to be taken by others that would release any Person
from any of such Person's material covenants or obligations under any
instrument or agreement included in the Trust Estate or that would result in
the amendment, hypothecation, subordination, termination or discharge of, or
impair the validity or effectiveness of, any such instrument or agreement,
except as expressly provided in this Indenture, the Sale and Servicing
Agreement or such other instrument or agreement.
(b) The Issuer may contract with other Persons acceptable to the
Controlling Party and with notification to the Rating Agencies to assist it
in performing its duties under this Indenture, and any performance of such
duties by a Person identified to the Indenture Trustee and the Note Insurer
in an Officer's Certificate of the Issuer shall be deemed to be action taken
by the Issuer. Initially, the Issuer has contracted with the Servicer and
the Administrator to assist the Issuer in performing its duties under this
Indenture.
(c) The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, the Basic Documents
and in the instruments and agreements included in the Trust Estate, including
but not limited to filing or causing to be filed all UCC financing statements
and continuation statements required to be filed by the terms of this
Indenture and the Sale and Servicing Agreement in accordance with and within
the time periods provided for herein and therein. Except as otherwise
expressly provided therein, the Issuer shall not waive, amend, modify,
supplement or terminate any Basic Document or any provision thereof without
the consent of the Note Insurer and either the Indenture Trustee or the
Holders of at least a majority of the Outstanding Amount of the Notes.
(d) If the Issuer shall have knowledge of the occurrence of a Servicer
Termination Event under the Sale and Servicing Agreement, the Issuer shall
promptly notify the Indenture Trustee, the Note Insurer and the Rating
Agencies thereof, and shall specify in such notice the action, if any, the
Issuer is taking with respect to such default.
(e) (Reserved)
(f) Upon any termination of the Servicer's rights and powers pursuant
to the Sale and Servicing Agreement, the Issuer shall promptly notify the
Indenture Trustee and the Note Insurer thereof. As soon as a Successor
Servicer is appointed, the Issuer shall notify the Indenture Trustee and the
Note Insurer in writing of such appointment, specifying in such notice the
name and address of such Successor Servicer.
(g) Without limitation of the absolute nature of the assignment granted
to the Indenture Trustee under this Indenture or the rights of the Indenture
Trustee hereunder, the Issuer agrees (i) that it will not, without the prior
written consent of the Note Insurer and either the Indenture Trustee or the
Holders of at least a majority in Outstanding Amount of the Notes, amend,
modify, waive, supplement, terminate or surrender, or agree to any amendment,
modification, supplement, termination, waiver or surrender of, the terms of
any Collateral (except to the extent otherwise provided in the Sale and
Servicing Agreement) or the Basic Documents, or waive timely performance or
observance by the Servicer or the Seller under the Sale and Servicing
Agreement; and (ii) that any such amendment shall not (A) increase or reduce
in any manner the amount of, or accelerate or delay the timing of,
distributions that are required to be made for the benefit of the Noteholders
or (B) reduce the aforesaid percentage of the Notes that is required to
consent to any such amendment, without the consent of the Holders of all
Outstanding Notes. If the Note Insurer and the Indenture Trustee or such
Holders, as applicable, agree to any such amendment, modification, supplement
or waiver, the Issuer agrees, promptly following a request by the Indenture
Trustee or the Note Insurer to do so, to execute and deliver, in its own name
and at its own expense, such agreements, instruments, consents and other
documents as the Indenture Trustee or the Note Insurer may deem necessary or
appropriate in the circumstances.
Section 3.08. Negative Covenants. So long as any Notes are
------------------
Outstanding, the Issuer shall not:
(i) except as expressly permitted by this Indenture, the
Receivables Purchase Agreement or the Sale and Servicing Agreement,
sell, transfer, exchange or otherwise dispose of any of the properties
or assets of the Issuer, including those included in the Trust Estate,
unless directed to do so by the Controlling Party;
(ii) claim any credit on, or make any deduction from the
principal or interest payable in respect of, the Notes (other than
amounts properly withheld from such payments under the Code) or assert
any claim against any present or former Noteholder by reason of the
payment of the taxes levied or assessed upon any part of the Trust
Estate; or
(iii) (A) permit the validity or effectiveness of this Indenture
to be impaired, or permit the lien of this Indenture to be amended,
hypothecated, subordinated, terminated or discharged, or permit any
Person to be released from any covenants or obligations with respect to
the Notes under this Indenture except as may be expressly permitted
hereby, (B) permit any lien, charge, excise, claim, security interest,
mortgage or other encumbrance (other than the lien of this Indenture) to
be created on or extend to or otherwise arise upon or burden the Trust
Estate or any part thereof or any interest therein or the proceeds
thereof (other than tax liens, mechanics' liens and other liens that
arise by operation of law, in each case on any of the Financed Vehicles
and arising solely as a result of an action or omission of the related
Obligor) or (C) permit the lien of this Indenture not to constitute a
valid first priority (other than with respect to any such tax,
mechanics' or other lien) security interest in the Trust Estate.
Section 3.09. Annual Statement as to Compliance. The Issuer will
---------------------------------
deliver to the Indenture Trustee, the Rating Agencies and the Note Insurer
(if the Note Insurer is the Controlling Party), within 120 days after the end
of each fiscal year of the Issuer (commencing with the fiscal year 1998), an
Officer's Certificate stating, as to the Authorized Officer signing such
Officer's Certificate, that:
(i) a review of the activities of the Issuer during such year
and of its performance under this Indenture has been made under such
Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based on
such review, the Issuer has complied with all conditions and covenants
under this Indenture throughout such year or, if there has been a
default in its compliance with any such condition or covenant,
specifying each such default known to such Authorized Officer and the
nature and status thereof.
Section 3.10. Issuer May Consolidate, etc., Only on Certain Terms.
---------------------------------------------------
(a) The Issuer shall not consolidate or merge with or into any other
Person, unless:
(i) the Person (if other than the Issuer) formed by or surviving
such consolidation or merger shall be a Person organized and existing
under the laws of the United States of America or any State and shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Indenture Trustee and the Note Insurer, in form
satisfactory to the Indenture Trustee and the Note Insurer, the due and
punctual payment of the principal of and interest on all Notes and the
performance or observance of every agreement and covenant of this
Indenture on the part of the Issuer to be performed or observed, all as
provided herein;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee and the
Note Insurer) to the effect that such transaction will not have any
material adverse tax consequence to the Issuer, any Noteholder or any
Certificateholder;
(v) any action that is necessary to maintain the lien and
security interest created by this Indenture shall have been taken;
(vi) the Issuer shall have delivered to the Indenture Trustee and
the Note Insurer an Officer's Certificate and an Opinion of Counsel each
stating that such consolidation or merger and such supplemental
indenture comply with this Article III and that all conditions precedent
herein provided for relating to such transaction have been complied with
(including any filing required by the Exchange Act); and
(vii) the Note Insurer has given its prior written consent with
a copy of such consent to the Indenture Trustee.
(b) The Issuer shall not convey or transfer any of its properties or
assets, including those included in the Trust Estate, to any Person, unless:
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer the conveyance or transfer of which
is hereby restricted (A) shall be a United States citizen or a Person
organized and existing under the laws of the United States of America or
any State, (B) expressly assumes, by an indenture supplemental hereto,
executed and delivered to the Indenture Trustee and the Note Insurer, in
form satisfactory to the Indenture Trustee and the Note Insurer, the due
and punctual payment of the principal of and interest on all Notes and
the performance or observance of every agreement and covenant of this
Indenture on the part of the Issuer to be performed or observed, all as
provided herein, (C) expressly agrees by means of such supplemental
indenture that all right, title and interest so conveyed or transferred
shall be subject and subordinate to the rights of Holders of the Notes
and the Note Insurer, (D) unless otherwise provided in such supplemental
indenture, expressly agrees to indemnify, defend and hold harmless the
Issuer and the Indenture Trustee against and from any loss, liability or
expense arising under or related to this Indenture and the Notes and
(E) expressly agrees by means of such supplemental indenture that such
Person (or, if a group of Persons, one specified Person) shall make all
filings with the Commission (and any other appropriate Person) required
by the Exchange Act in connection with the Notes;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee and the
Note Insurer) to the effect that such transaction will not have any
material adverse tax consequence to the Issuer, any Noteholder or any
Certificateholder;
(v) any action that is necessary to maintain the lien and
security interest created by this Indenture shall have been taken;
(vi) the Issuer shall have delivered to the Indenture Trustee and
the Note Insurer an Officer's Certificate and an Opinion of Counsel each
stating that such conveyance or transfer and such supplemental indenture
comply with this Article III and that all conditions precedent herein
provided for relating to such transaction have been complied with
(including any filing required by the Exchange Act); and
(vii) The Note Insurer has given its prior written consent with
a copy of such consent to the Indenture Trustee.
Section 3.11. Successor or Transferee.
-----------------------
(a) Upon any consolidation or merger of the Issuer in accordance with
Section 3.10(a), the Person formed by or surviving such consolidation or
merger (if other than the Issuer) shall succeed to, and be substituted for,
and may exercise every right and power of, the Issuer under this Indenture
with the same effect as if such Person had been named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of
the Issuer pursuant to Section 3.10(b), Hyundai Auto Receivables Trust 1998-A
will be released from every covenant and agreement of this Indenture to be
observed by or performed on the part of the Issuer with respect to the Notes
immediately upon the delivery of written notice to the Indenture Trustee and
the Note Insurer stating that Hyundai Auto Receivables Trust 1998-A is to be
so released.
Section 3.12. No Other Business. The Issuer shall not engage in any
-----------------
business other than financing, purchasing, owning, selling and managing the
Receivables in the manner contemplated by this Indenture and the Basic
Documents and any activities incidental thereto. After the Funding Period,
the Issuer shall not fund the purchase of any new Receivables.
Section 3.13. No Borrowing. The Issuer shall not issue, incur,
------------
assume, guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes.
Section 3.14. Servicer's Obligations. The Issuer shall cause the
----------------------
Servicer to comply with Sections 4.09, 4.10, 4.11 and Article VII of the Sale
and Servicing Agreement.
Section 3.15. Guarantees, Loans, Advances and Other Liabilities.
-------------------------------------------------
Except as contemplated by the Trust Agreement, the Sale and Servicing
Agreement or this Indenture, the Issuer shall not make any loan or advance or
credit to, or guarantee (directly or indirectly or by an instrument having
the effect of assuring another's payment or performance on any obligation or
capability of so doing or otherwise), endorse or otherwise become
contingently liable, directly or indirectly, in connection with the
obligations, stocks or dividends of, or own, purchase, repurchase or acquire
(or agree contingently to do so) any stock, obligations, assets or securities
of, or any other interest in, or make any capital contribution to, any
Person.
Section 3.16. Capital Expenditures. The Issuer shall not make any
--------------------
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
Section 3.17. Removal of Administrator. So long as any Notes are
------------------------
Outstanding, the Issuer shall not remove the Administrator unless the Rating
Agency Condition shall have been satisfied in connection with such removal
and the Indenture Trustee receives written notice of the foregoing and the
Note Insurer has given its prior written consent with a copy of such consent
to the Indenture Trustee.
Section 3.18. Restricted Payments. Except with respect to the
-------------------
proceeds from issuance of the Notes, the Issuer shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest or
security in or of the Issuer or to the Servicer, (ii) redeem, purchase,
retire or otherwise acquire for value any such ownership or equity interest
or security or (iii) set aside or otherwise segregate any amounts for any
such purpose; provided, however, that the Issuer may make, or cause to be
made, distributions as contemplated by, and to the extent funds are available
for such purpose under, the Sale and Servicing Agreement, this Indenture or
the Trust Agreement. The Issuer will not, directly or indirectly, make
payments to or distributions from the Note Distribution Account, the
Collection Account, the Capitalized Interest Account, the Yield Maintenance
Account, the Pre-Funding Account or the Reserve Account except in accordance
with this Indenture and the Basic Documents.
Section 3.19. Notice of Events of Default. The Issuer shall give
---------------------------
the Indenture Trustee, the Note Insurer and the Rating Agencies prompt
written notice of each Event of Default hereunder, and of each default on the
part of the Servicer or the Seller of its obligations under the Sale and
Servicing Agreement.
Section 3.20. Further Instruments and Acts. Upon request of the
----------------------------
Indenture Trustee or the Note Insurer (if the Note Insurer is at such time
the Controlling Party), the Issuer will execute and deliver such further
instruments and do such further acts as may be reasonably necessary or proper
to carry out more effectively the purpose of this Indenture.
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction and Discharge of Indenture. This Indenture
---------------------------------------
shall cease to be of further effect with respect to the Notes except as to
(i) rights of registration of transfer and exchange, (ii) substitution of
mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders to
receive payments of principal thereof and interest thereon (including any
such right of the Note Insurer pursuant to Section 2.08(c) or the proviso to
the definition of "Outstanding"), (iv) Sections 3.03, 3.04, 3.05, 3.08, 3.10,
3.11, 3.12, 3.13, 3.15, 3.16 and 3.18, (v) the rights, obligations and
immunities of the Indenture Trustee hereunder (including the rights of the
Indenture Trustee under Section 6.07 and the obligations of the Indenture
Trustee under Section 4.02) and (vi) the rights of Noteholders as
beneficiaries hereof with respect to the property so deposited with the
Indenture Trustee payable to all or any of them, and the Indenture Trustee,
on demand of and at the expense of the Issuer, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture with
respect to the Notes, when
(A) either
(1) all Notes theretofore authenticated and delivered (other
than (i) Notes that have been destroyed, lost or stolen and that
have been replaced or paid as provided in Section 2.06 and
(ii) Notes for the payment of which money has theretofore been
deposited in trust or segregated and held in trust by the Issuer
and thereafter repaid to the Issuer or discharged from such trust,
as provided in Section 3.03) have been delivered to the Indenture
Trustee for cancellation and the Policy has expired and been
returned to the Note Insurer for cancellation; or
(2) all Notes not theretofore delivered to the Indenture
Trustee for cancellation
a. have become due and payable,
b. will become due and payable at the Class A-2 Final
Scheduled Distribution Date within one year or
c. are to be called for redemption within one year
under arrangements satisfactory to the Indenture Trustee for
the giving of notice of redemption by the Indenture Trustee in
the name, and at the expense, of the Issuer;
and the Issuer, in the case of a., b. or c. above, has irrevocably
deposited or caused to be irrevocably deposited with the Indenture
Trustee cash or direct obligations of or obligations guaranteed by the
United States of America (that will mature prior to the date such
amounts are payable), in trust for such purpose, in an amount sufficient
to pay and discharge the entire indebtedness on (a) such Notes not
theretofore delivered to the Indenture Trustee for cancellation when due
to the applicable Final Scheduled Distribution Date or Redemption Date
(if Notes shall have been called for redemption pursuant to
Section 10.01(a)), as the case may be, and (b) all amounts due to the
Note Insurer pursuant to Section 5.06(b) of the Sale and Servicing
Agreement and as subrogee to the rights of the Holders of the Notes
pursuant to Section 5.12 of the Sale and Servicing Agreement and Section
2.08(c) hereof;
(B) the Issuer has paid or caused to be paid all other sums
payable hereunder by the Issuer including, but not limited to, fees and
expenses due to the Indenture Trustee; and
(C) the Issuer has delivered to the Indenture Trustee and the Note
Insurer an Officer's Certificate, an Opinion of Counsel and (if required
by the TIA or the Indenture Trustee) an Independent Certificate from a
firm of certified public accountants, each meeting the applicable
requirements of Section 11.01(a) and, subject to Section 11.02, each
stating that all conditions precedent herein provided for relating to
the satisfaction and discharge of this Indenture have been complied
with.
Section 4.02. Application of Trust Money. All moneys deposited with
---------------------------
the Indenture Trustee pursuant to Section 4.01 hereof shall be held in trust
and applied by it in accordance with the provisions of the Notes and this
Indenture to the payment, either directly or through any Paying Agent,
as the Indenture Trustee may determine, to the Note Insurer and the related
Noteholders for the payment or redemption of which such
moneys have been deposited with the Indenture Trustee, of all sums due and to
become due thereon for principal and interest; but such moneys need not be
segregated from other funds except to the extent required herein, in the Sale
and Servicing Agreement or by law.
Section 4.03. Repayment of Moneys Held by Paying Agent. In connection
----------------------------------------
with the satisfaction and discharge of this Indenture with respect to the
Notes, all moneys then held by any Paying Agent other than the Indenture
Trustee under the provisions of this Indenture with respect to such Notes
shall, upon written demand of the Issuer, be paid to the Indenture Trustee to
be held and applied according to Section 3.03; and thereupon, such Paying
Agent shall be released from all further liability with respect to such
moneys.
Section 4.04. Release of Collateral. Subject to Section 11.01 and the
---------------------
terms of the Basic Documents, the Indenture Trustee shall release property
from the lien of this Indenture only upon receipt by it and the Note Insurer
of an Issuer Request accompanied by an Officer's Certificate, an Opinion of
Counsel and Independent Certificates in accordance with TIA SectionSection
314(c) and 314(d)(1) or an Opinion of Counsel in lieu of such Independent
Certificates to the effect that the TIA does not require any such Independent
Certificates. The Trustee shall surrender the Policy to the Note Insurer
upon the satisfaction of the conditions in Section 4.01).
ARTICLE V
REMEDIES
Section 5.01. Events of Default. "Event of Default", wherever used
-----------------
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body):
(i) default in the payment of any interest on any Note when the
same becomes due and payable, and such default shall continue for a
period of five days (solely for purposes of this clause, a payment on
the Notes funded by the Note Insurer shall be deemed to be a payment
made by the Issuer);
(ii) default in the payment of the principal of or any
installment of the principal of any Note when the same becomes due and
payable (solely for purposes of this clause, a payment on the Notes
funded by the Note Insurer shall be deemed to be a payment made by the
Issuer);
(iii) a Trigger Event shall have occurred;
(iv) default in the observance or performance of any covenant or
agreement of the Issuer made in this Indenture (other than a covenant or
agreement, a default in the observance or performance of which is
elsewhere in this Section specifically dealt with), or any
representation or warranty of the Issuer made in this Indenture or in
any certificate or other writing delivered pursuant hereto or in
connection herewith proving to have been incorrect in any material
respect as of the time when the same shall have been made, and such
default shall continue or not be cured, or the circumstance or condition
in respect of which such misrepresentation or warranty was incorrect
shall not have been eliminated or otherwise cured, for a period of
30 days after there shall have been given, by registered or certified
mail, to the Issuer by the Indenture Trustee or the Note Insurer (so
long as no Note Insurer Default shall have occurred and be continuing)
or to the Issuer and the Indenture Trustee by the Holders of at least
25% of the Outstanding Amount of the Notes, a written notice specifying
such default or incorrect representation or warranty and requiring it to
be remedied and stating that such notice is a notice of Default
hereunder;
(v) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer or any substantial
part of the Trust Estate in an involuntary case under any applicable
federal or state bankruptcy, insolvency or other similar law now or
hereafter in effect, or the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of the
Issuer or for any substantial part of the Trust Estate, or the ordering
of the winding-up or liquidation of the Issuer's affairs, and such
decree or order shall remain unstayed and in effect for a period of
60 consecutive days; or
(vi) the commencement by the Issuer of a voluntary case under any
applicable federal or state bankruptcy, insolvency or other similar law
now or hereafter in effect, or the consent by the Issuer to the entry of
an order for relief in an involuntary case under any such law, or the
consent by the Issuer to the appointment of or taking of possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of the Issuer or for any substantial part of the Trust
Estate, or the making by the Issuer of any general assignment for the
benefit of creditors, or the failure by the Issuer generally to pay its
debts as such debts become due, or the taking of any action by the
Issuer in furtherance of any of the foregoing.
The Issuer shall promptly deliver to the Indenture Trustee and, if the Note
Insurer is the Controlling Party, the Note Insurer, written notice in the
form of an Officer's Certificate of any event that with the giving of notice
and the lapse of time would become an Event of Default under clause (iii),
its status and what action the Issuer is taking or proposes to take with
respect thereto.
Section 5.02. Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
(a) If an Event of Default shall occur and the Note Insurer is not the
Controlling Party, then and in every such case the Indenture Trustee may or
the Indenture Trustee as directed in writing by the Holders of Notes
representing not less than a majority of the Outstanding Amount of the Notes
shall declare all the Notes to be then immediately due and payable, by a
notice in writing to the Issuer (and to the Indenture Trustee if given by
Noteholders), and upon any such declaration the Outstanding Amount of such
Notes, together with accrued and unpaid interest thereon through the date of
acceleration, shall become immediately due and payable; provided, however,
that if on the date any such Event of Default occurs or is continuing, the
Note Insurer is the Controlling Party, then the Note Insurer, in its sole
discretion, may determine whether or not to accelerate payment on the Notes.
In the event of any acceleration of the Notes by operation of this Section
5.02, the Indenture Trustee shall continue to be entitled to make claims
under the Policy pursuant to Section 5.09 of the Sale and Servicing
Agreement. Payments under the Policy following acceleration of the Notes
shall be applied by the Indenture Trustee:
FIRST: to the payment of amounts due and unpaid on the Notes
in respect of interest, ratably, without preference or priority of
any kind;
SECOND: to the payment of amounts due and unpaid on the
Class A-1 Notes in respect of principal, ratably, without
preference or priority of any kind, until the Class A-1 Notes are
paid in full; and
THIRD: to the payment of amounts due and unpaid on the Class A-2
Notes in respect of principal, ratably, without preference or priority
of any kind, until the Class A-2 Notes are paid in full.
(b) If an Event of Default occurs at any time when the Note Insurer is
the Controlling Party, the Note Insurer shall have the right, but not the
obligation, to make one or more accelerated payments on the Notes and to
prepay the Notes, in whole or in part, on any date or dates following the
occurrence of such Event of Default if the Note Insurer, in its sole
discretion, shall so elect. This right of the Note Insurer to make
accelerated payments on the Notes is in addition to its obligation to make
payments on the Notes under the Policy, and in no event shall the Note
Insurer make a payment on the Notes to the Indenture Trustee for distribution
to the Noteholders later than the date on which such amount is due under the
terms of the Notes and the Policy.
(c) If an Event of Default under this Indenture shall have occurred and
be continuing at any time when the Indenture Trustee is the Controlling
Party, the Indenture Trustee in its discretion may, or if so requested in
writing by Holders of Notes representing at least a majority of the
Outstanding Amount of the Notes, shall, declare by written notice to the
Issuer all of the Notes to be immediately due and payable, and upon any such
declaration, the Outstanding Amount of the Notes, together with accrued
interest thereon through the date of acceleration, shall become immediately
due and payable as provided in the Notes set forth in Exhibits A-1 and A-2.
Notwithstanding anything to the contrary in this paragraph (c), if an Event
of Default specified in clauses (v) or (vi) of Section 5.01 shall have
occurred and be continuing at any time when the Indenture Trustee is the
Controlling Party, the Notes shall become immediately due and payable at par,
together with accrued interest thereon.
(d) At any time after such declaration of acceleration of maturity has
been made and before a judgment or decree for payment of the money due has
been obtained by the Indenture Trustee as hereinafter in this Article V
provided, either the Note Insurer (so long as a Note Insurer Default has not
occurred and is continuing) or the Holders of Notes representing a majority
of the Outstanding Amount of the Notes (if a Note Insurer Default has
occurred and is continuing), by written notice to the Issuer and the
Indenture Trustee, may rescind and annul such declaration and its
consequences if:
(i) the Issuer has paid or deposited with the Indenture Trustee
a sum sufficient to pay:
(A) all payments of principal of and interest on the Notes
and all other amounts that would then be due hereunder or upon such
Notes if the Event of Default giving rise to such acceleration had
not occurred; and
(B) all sums paid by the Indenture Trustee hereunder plus all
amounts due to the Note Insurer under the Basic Documents and the
reasonable compensation, expenses and disbursements of each of the
Indenture Trustee and the Note Insurer and its agents and counsel
and the reasonable compensation, expenses and disbursements of the
Owner Trustee and its agents and counsel; and
(ii) all Events of Default, other than the nonpayment of the
principal of the Notes that has become due solely by such acceleration,
have been cured or waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any right
consequent thereto.
(e) In the event of a sale of the Trust Estate pursuant to Section 9.01
of the Trust Agreement, (i) if, based on offers to purchase the Receivables
accepted by the Indenture Trustee, the Note Insurer would not be reimbursed
in full for all amounts due to it under the Insurance Agreement following the
distribution of the proceeds of such sale pursuant to Section 5.06(b) of the
Sale and Servicing Agreement and (ii) the Certificateholders have been given
prior written notice thereof and five business days to bid thereon, the Note
Insurer shall be permitted in its sole discretion to request an assignment of
Receivables and all other assets of the Trust Estate in lieu of such a
distribution of such sale proceeds. In the event that the Note Insurer
elects to request such an assignment, promptly following receipt by the
Indenture Trustee of notice of such request, the Indenture Trustee shall file
with the Note Insurer a Notice of Claim in accordance with the Policy in
respect of the Outstanding Amount, if any, of the Notes that are unpaid on
the Distribution Date immediately preceding the date of the receipt by the
Indenture Trustee of such notice, plus accrued interest thereon. All amounts
received by the Indenture Trustee from the Note Insurer pursuant to this
Section 5.02 shall be distributed to the Noteholders pursuant to Section
5.02(a). Immediately upon payment by the Note Insurer of all amounts
required to be paid by the Note Insurer pursuant to this Section 5.02, the
Indenture Trustee shall be deemed to have assigned the Receivables and all
other assets of the Trust Estate to the Note Insurer or its designee. To
effect such deemed assignment, the Indenture Trustee shall do and perform any
reasonable acts and execute any further instruments reasonably requested by
the Note Insurer.
Section 5.03. Collection of Indebtedness and Suits for Enforcement by
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Indenture Trustee; Authority of the Controlling Party.
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(a) The Issuer covenants that if (i) default is made in the payment of
any interest on any Note when the same becomes due and payable, and such
default continues for a period of five days or, (ii) default is made in the
payment of the principal of or any installment of the principal of any Note
when the same becomes due and payable, the Issuer will, upon demand of the
Indenture Trustee made at the direction of the Note Insurer, pay to it, for
the benefit of the Holders of the Notes and the Note Insurer, the entire
amount then due and payable on such Notes in respect of principal and
interest, with interest on the overdue principal and, to the extent payment
at such rate of interest shall be legally enforceable, on overdue
installments of interest at the related Interest Rate and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses and
disbursements of the Indenture Trustee and its agents and counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts upon
such demand, the Indenture Trustee, in its own name and as trustee of an
express trust, may, with the written consent of the Note Insurer (so long as
no Note Insurer Default shall have occurred and be continuing), institute a
Proceeding for the collection of the sums so due and unpaid, and may
prosecute such Proceeding to judgment or final decree, and may enforce the
same against the Issuer or other obligor on such Notes and collect in the
manner provided by law out of the Trust Estate or the property of any other
obligor on such Notes, wherever situated, the moneys adjudged or decreed to
be payable. At any time when (i) the Note Insurer is the Controlling Party
or (ii) (A) the Note Insurer is the Holder of Notes pursuant to Section
2.08(c) or Section 5.12 of the Sale and Servicing Agreement and (B) all
amounts due to all other Holders of the Notes pursuant to the Notes and this
Indenture have been paid in full, the Note Insurer may, in its own name,
institute any Proceeding or take any other action permitted under this
Section to collect amounts due hereunder from the Issuer or any other obligor
on the Notes.
(c) If an Event of Default occurs, the Indenture Trustee may, as more
particularly provided in Section 5.04, in its discretion with the prior
written consent of the Controlling Party or shall at the directions of the
Controlling Party proceed to protect and enforce its rights and the rights of
the Noteholders, by such appropriate Proceedings as the Indenture Trustee and
the Controlling Party shall reasonably deem most effective to protect and
enforce any such rights, whether for the specific enforcement of any covenant
or agreement in this Indenture or in aid of the exercise of any power granted
herein, or to enforce any other proper remedy or legal or equitable right
vested in the Indenture Trustee by this Indenture or by law.
(d) In case there shall be pending, relative to the Issuer or any other
obligor on the Notes or any Person having or claiming an ownership interest
in the Trust Estate, Proceedings under Title 11 of the United States Code or
any other applicable federal or state bankruptcy, insolvency or other similar
law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, or liquidator, sequestrator or similar official shall have
been appointed for or taken possession of the Issuer or its property or such
other obligor or Person, or in case of any other comparable Proceedings
relative to the Issuer or other obligor on the Notes, or to the creditors or
property of the Issuer or such other obligor, the Indenture Trustee,
irrespective of whether the principal of any Notes shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective
of whether the Indenture Trustee shall have made any demand pursuant to the
provisions of this Section, shall be entitled and empowered (but only at the
written direction of the Note Insurer if the Note Insurer is the Controlling
Party), by intervention in such Proceedings or otherwise:
(i) to file and prove a claim or claims for the entire amount of
principal and interest owing and unpaid in respect of the Notes and to
file such other papers or documents as may be necessary or advisable in
order to have the claims of the Indenture Trustee (including any claim
for reasonable compensation to the Indenture Trustee and each
predecessor Indenture Trustee, and their respective agents, attorneys
and counsel, and for reimbursement of all expenses and liabilities
incurred, by the Indenture Trustee and each predecessor Indenture
Trustee, except as a result of negligence or bad faith) and of the
Noteholders allowed in such Proceedings;
(ii) unless prohibited by applicable law or regulation, to vote
on behalf of the Holders of Notes in any election of a trustee, a
standby trustee or a Person performing similar functions in any such
Proceedings;
(iii) to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute all amounts received
with respect to the claims of the Noteholders and of the Indenture
Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the
Indenture Trustee or the Holders of Notes allowed in any Proceedings
relative to the Issuer, its creditors or its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee and, in the event that the Indenture
Trustee shall consent to the making of payments directly to such Noteholders,
to pay to the Indenture Trustee such amounts as shall be sufficient to cover
reasonable compensation to the Indenture Trustee, each predecessor Indenture
Trustee and their respective agents, attorneys and counsel, and all other
expenses and liabilities incurred by the Indenture Trustee and each
predecessor Indenture Trustee except as a result of negligence or bad faith.
(e) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf
of any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the
election of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this Indenture,
or under any of the Notes, may be enforced by the Indenture Trustee without
the possession of any of the Notes or the production thereof in any
Proceedings relative thereto, and any such Proceedings instituted by the
Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Holders of the Notes and the Note Insurer.
(g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture
to which the Indenture Trustee shall be a party), the Indenture Trustee shall
be held to represent all the Holders of the Notes, and it shall not be
necessary to make any Noteholder a party to any such Proceedings.
Section 5.04. Remedies; Priorities.
--------------------
(a) If an Event of Default shall have occurred and either (i) a Note
Insurer Default shall also have occurred and is continuing, the Indenture
Trustee may or (ii) if the Note Insurer is the Controlling Party and the Note
Insurer so directs the Indenture Trustee in writing, the Indenture Trustee
shall, do one or more of the following (subject to Section 5.05):
(i) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then payable on the
Notes or under this Indenture with respect thereto, whether by
declaration or otherwise, enforce any judgment obtained and collect from
the Issuer and any other obligor on such Notes moneys adjudged due;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Trust Estate;
(iii) exercise any remedies of a secured party under the UCC and
take any other appropriate action to protect and enforce the rights and
remedies of the Indenture Trustee, the Note Insurer and the Holders of
the Notes; and
(iv) sell the Trust Estate or any portion thereof or rights or
interest therein, at one or more public or private sales called and
conducted in any manner permitted by law;
provided, however, that (x) if a Note Insurer Default shall have occurred and
is continuing, the Indenture Trustee may not sell or otherwise liquidate the
Trust Estate following an Event of Default, other than an Event of Default
described in Section 5.01(i) or (ii), unless (A) the Holders of 100% of the
Outstanding Amount of the Notes consent thereto, (B) the proceeds of such
sale or liquidation distributable to the Noteholders are sufficient to
discharge in full all amounts then due and unpaid on such Notes in respect of
principal and interest or (C) the Indenture Trustee determines that the Trust
Estate will not continue to provide sufficient funds for the payment of
principal of and interest on the Notes as they would have become due if the
Notes had not been declared due and payable, and the Indenture Trustee
obtains the consent of Holders of a majority of the Outstanding Amount of the
Notes, (y) if the Note Insurer is the Controlling Party, the Note Insurer may
not direct the Indenture Trustee, and the Indenture Trustee shall not comply
with any such direction, to sell or otherwise liquidate the Collateral
following an Event of Default unless (1) the conditions set forth in clause
(x) are met or (2) the Note Insurer has paid the Notes in full under the
Policy. In determining such sufficiency or insufficiency with respect to
clause (B) and (C), the Indenture Trustee may, at the Issuer's expense and
paid in the priority set forth in Section 5.06(b) of the Sale and Servicing
Agreement, but need not, obtain and conclusively rely upon an opinion of an
Independent investment banking or accounting firm of national reputation as
to the feasibility of such proposed action and as to the sufficiency of the
Trust Estate for such purpose.
(b) If the Indenture Trustee collects any money or property pursuant to
this Article V, it shall pay out the money or property in the following
order:
FIRST: to the Indenture Trustee for amounts due under
Section 6.07;
SECOND: to Noteholders for amounts due and unpaid on the Notes in
respect of interest (including any premium), ratably, without preference
or priority of any kind, according to the amounts due and payable on the
Notes in respect of interest (including any premium);
THIRD: to Holders of the Class A-1 Notes for amounts due and
unpaid on the Class A-1 Notes in respect of principal, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Class A-1 Notes in respect of principal, until the
Outstanding Amount of the Class A-1 Notes is reduced to zero;
FOURTH: to Holders of the Class A-2 Notes for amounts due and
unpaid on the Class A-2 Notes in respect of principal, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Class A-2 Notes in respect of principal, until the
Outstanding Amount of the Class A-2 Notes is reduced to zero;
FIFTH: to the Note Insurer for any amounts due and unpaid
pursuant to Section 5.06(b) of the Sale and Servicing Agreement and
Section 5.12 of the Sale and Servicing Agreement; and
SIXTH: pursuant to Section 5.06 of the Sale and Servicing
Agreement;
provided, however, that any amounts collected from the Pre-Funding Account or
Capitalized Interest Account shall be paid on the Notes pro rata, based upon
their respective principal balances as of the preceding Distribution Date,
for amounts allocable to principal due and unpaid, prior to the application
of priorities FIRST through FIFTH, above.
The Indenture Trustee may fix a record date and payment date for any payment
to Noteholders pursuant to this Section. At least 15 days before such record
date, the Issuer shall mail to each Noteholder, the Note Insurer and the
Indenture Trustee a notice that states the record date, the payment date and
the amount to be paid.
Section 5.05. Optional Preservation of the Receivables. If the
----------------------------------------
Indenture Trustee is the Controlling Party and the Notes have been declared
to be due and payable under Section 5.02 following an Event of Default, and
such declaration and its consequences have not been rescinded and annulled,
the Indenture Trustee may, but need not, elect to maintain possession of the
Trust Estate. It is the desire of the parties hereto and the Noteholders
that there be at all times sufficient funds for the payment of principal of
and interest on the Notes, and the Indenture Trustee shall take such desire
into account when determining whether or not to maintain possession of the
Trust Estate. In determining whether or not to maintain possession of the
Trust Estate, the Indenture Trustee may, at the expense of the Issuer and
paid in the priority set forth in Section 5.06(b) of the Sale and Servicing
Agreement, but need not, obtain and conclusively rely upon an opinion of an
Independent investment banking or accounting firm of national reputation as
to the feasibility of such proposed action and as to the sufficiency of the
Trust Estate for such purpose.
Section 5.06. Limitation of Suits. No Holder of any Note shall have
-------------------
any right to institute any Proceeding, judicial or otherwise, with respect to
this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless:
(i) such Holder has previously given written notice to the
Indenture Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the Outstanding Amount
of the Notes have made written request to the Indenture Trustee to
institute such Proceeding in respect of such Event of Default in its own
name as Indenture Trustee hereunder;
(iii) such Holder or Holders have offered to the Indenture Trustee
reasonable indemnity against the costs, expenses and liabilities that
may be incurred in complying with such request;
(iv) the Indenture Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute such
Proceedings;
(v) no direction inconsistent with such written request has been
given to the Indenture Trustee during such 60-day period by the Holders
of a majority of the Outstanding Amount of the Notes; and
(vi) the Note Insurer has given its prior written consent if it
is the Controlling Party or the Indenture Trustee is the Controlling
Party.
It is understood and intended that no one or more Holders of Notes shall have
any right in any manner whatsoever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Notes or to obtain or to seek to obtain priority or
preference over any other Holders or to enforce any right under this
Indenture, except in the manner herein provided.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of
Notes pursuant to this Section, each representing less than a majority of the
Outstanding Amount of the Notes, the Indenture Trustee in its sole discretion
may determine what action, if any, shall be taken, notwithstanding any other
provisions of this Indenture.
Section 5.07. Unconditional Rights of Noteholders To Receive Principal
--------------------------------------------------------
and Interest. Notwithstanding any other provisions in this Indenture, the
------------
Holder of any Note shall have the right, which is absolute and unconditional,
to receive payment of the principal of and interest, if any, on such Note on
or after the respective due dates thereof expressed in such Note or in this
Indenture (or, in the case of redemption, on or after the Redemption Date)
and to institute suit for the enforcement of any such payment, and such right
shall not be impaired without the consent of such Holder.
Section 5.08. Restoration of Rights and Remedies. If the Indenture
----------------------------------
Trustee, the Note Insurer, or any Noteholder has instituted any Proceeding to
enforce any right or remedy under this Indenture and such Proceeding has been
discontinued or abandoned for any reason or has been determined adversely to
the Indenture Trustee, the Note Insurer or to such Noteholder, then and in
every such case the Issuer, the Indenture Trustee, the Note Insurer and the
Noteholders shall, subject to any determination in such Proceeding, be
restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Indenture Trustee, the Note Insurer
and the Noteholders shall continue as though no such Proceeding had been
instituted.
Section 5.09. Rights and Remedies Cumulative. No right or remedy
------------------------------
herein conferred upon or reserved to the Indenture Trustee, the Note Insurer
or to the Noteholders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.
Section 5.10. Delay or Omission Not a Waiver. No delay or omission of
------------------------------
the Indenture Trustee, or any Holder of any Note or the Note Insurer to
exercise any right or remedy accruing upon any Default or Event of Default
shall impair any such right or remedy or constitute a waiver of any such
Default or Event of Default or an acquiescence therein. Every right and
remedy given by this Article V or by law to the Indenture Trustee to the
Noteholders or the Note Insurer may be exercised from time to time, and as
often as may be deemed expedient, by the Indenture Trustee, the Noteholders
or the Note Insurer, as the case may be.
Section 5.11. Control by Noteholders. If the Indenture Trustee is the
----------------------
Controlling Party, the Holders of a majority of the Outstanding Amount of the
Notes shall have the right to direct the time, method and place of conducting
any Proceeding for any remedy available to the Indenture Trustee with respect
to the Notes or exercising any trust or power conferred on the Indenture
Trustee; provided that:
(i) such direction shall not be in conflict with any rule of law
or with this Indenture;
(ii) subject to the express terms of Section 5.04, any direction
to the Indenture Trustee to sell or liquidate the Trust Estate shall be
by Holders of Notes representing not less than 100% of the Outstanding
Amount of the Notes;
(iii) if the conditions set forth in Section 5.05 have been
satisfied and the Indenture Trustee elects to retain the Trust Estate
pursuant to such Section, then any written direction to the Indenture
Trustee by Holders of Notes representing less than 100% of the
Outstanding Amount of the Notes to sell or liquidate the Trust Estate
shall be of no force and effect; and
(iv) the Indenture Trustee may take any other action deemed
proper by the Indenture Trustee that is not inconsistent with such
direction.
Notwithstanding the rights of Noteholders set forth in this Section, subject
to Section 6.01, the Indenture Trustee need not take any action that it
determines might involve it in liability or might materially adversely affect
the rights of any Noteholders not consenting to such action.
Section 5.12. Waiver of Past Defaults. Prior to the declaration of the
-----------------------
acceleration of the maturity of the Notes as provided in Section 5.02, the
Note Insurer may or, at any time when the Note Insurer is not the Controlling
Party, the Holders of Notes of not less than a majority of the Outstanding
Amount of the Notes may, waive any past Default or Event of Default and its
consequences except a Default (a) in payment of principal of or interest on
any of the Notes or (b) in respect of a covenant or provision hereof that
cannot be modified or amended without the consent of the Holder of each Note.
In the case of any such waiver, the Issuer, the Indenture Trustee, the Note
Insurer and the Holders of the Notes shall be restored to their former
positions and rights hereunder, respectively; but no such waiver shall extend
to any subsequent or other Default or impair any right consequent thereto.
Upon any such waiver, such Default shall cease to exist and be deemed to
have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right
consequent thereto.
Section 5.13. Undertaking for Costs. All parties to this Indenture
---------------------
agree, and each Holder of a Note by such Holder's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Indenture, or in
any suit against the Indenture Trustee for any action taken, suffered or
omitted by it as Indenture Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may
in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section shall not apply to (a) any suit instituted
by the Indenture Trustee or the Note Insurer, (b) any suit instituted by any
Noteholder, or group of Noteholders, in each case holding in the aggregate
more than 10% of the Outstanding Amount of the Notes or (c) any suit
instituted by any Noteholder for the enforcement of the payment of principal
of or interest on any Note on or after the respective due dates expressed in
such Note and in this Indenture (or, in the case of redemption, on or after
the Redemption Date).
Section 5.14. Waiver of Stay or Extension Laws. The Issuer covenants
--------------------------------
(to the extent that it may lawfully do so) that it will not at any time
insist upon, or plead or in any manner whatsoever claim or take the benefit
or advantage of, any stay or extension law wherever enacted, now or at any
time hereafter in force, that may affect the covenants or the performance of
this Indenture; and the Issuer (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Indenture Trustee or the Note Insurer, but will suffer
and permit the execution of every such power as though no such law had been
enacted.
Section 5.15. Action on Notes. The Indenture Trustee's right to seek
---------------
and recover judgment on the Notes or under this Indenture shall not be
affected by the seeking, obtaining or application of any other relief under
or with respect to this Indenture. Neither the lien of this Indenture nor
any rights or remedies of the Indenture Trustee, the Note Insurer or the
Noteholders shall be impaired by the recovery of any judgment by the
Indenture Trustee or the Note Insurer against the Issuer or by the levy of
any execution under such judgment upon any portion of the Trust Estate or
upon any of the assets of the Issuer. Any money or property collected by the
Indenture Trustee shall be applied in accordance with Section 5.04(b).
Section 5.16. Performance and Enforcement of Certain Obligations.
--------------------------------------------------
(a) Promptly following a request from the Indenture Trustee or the Note
Insurer to do so and at the Administrator's expense, the Issuer shall take
all such lawful action as the Indenture Trustee may request to compel or
secure the performance and observance by the Seller or the Servicer, as
applicable, of each of their obligations to the Issuer under or in connection
with the Sale and Servicing Agreement or the Receivables Purchase Agreement,
as applicable, and to exercise any and all rights, remedies, powers and
privileges lawfully available to the Issuer under or in connection with the
Sale and Servicing Agreement or the Receivables Purchase Agreement to the
extent and in the manner directed by the Indenture Trustee or the Note
Insurer, including the transmission of notices of default on the part of the
Seller or the Servicer thereunder and the institution of legal or
administrative actions or proceedings to compel or secure performance by the
Seller or the Servicer of each of their obligations under the Sale and
Servicing Agreement or the Receivables Purchase Agreement.
(b) If an Event of Default has occurred at any time when the Note
Insurer is not the Controlling Party, the Indenture Trustee may, and at the
direction (which direction shall be in writing) of the Holders of not less
than a majority of the Outstanding Amount of the Notes shall, exercise all
rights, remedies, powers, privileges and claims of the Issuer against the
Seller or the Servicer under or in connection with the Sale and Servicing
Agreement and the Receivables Purchase Agreement including the right or power
to take any action to compel or secure performance or observance by the
Seller or the Servicer, as the case may be, of each of their obligations to
the Issuer thereunder and to give any consent, request, notice, direction,
approval, extension or waiver under the Sale and Servicing Agreement and the
Receivables Purchase Agreement, as the case may be, and any right of the
Issuer to take such action shall be suspended.
ARTICLE VI
THE INDENTURE TRUSTEE
Section 6.01. Duties of Indenture Trustee.
---------------------------
(a) If an Event of Default has occurred and is continuing of which a
Responsible Officer of the Indenture Trustee has actual knowledge, the
Indenture Trustee shall exercise the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this Indenture
against the Indenture Trustee; and
(ii) in the absence of bad faith or negligence on its part, the
Indenture Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
the face value of the certificates or opinions furnished to the
Indenture Trustee and conforming to the requirements of this Indenture;
however, the Indenture Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements of
this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section;
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is proved
that the Indenture Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Indenture Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 5.11.
(d) Every provision of this Indenture that in any way relates to the
Indenture Trustee is subject to paragraphs (a), (b), (c) and (g) of this
Section.
(e) The Indenture Trustee shall not be liable for indebtedness
evidenced by or arising under any of the Basic Documents, including principal
of or interest on the Notes, or interest on any money received by it except
as the Indenture Trustee may agree in writing with the Issuer.
(f) Money held in trust by the Indenture Trustee need not be segregated
from other funds except to the extent required by law or the terms of this
Indenture or the Sale and Servicing Agreement.
(g) No provision of this Indenture shall require the Indenture Trustee
to advance, expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties hereunder or in the
exercise of any of its rights or powers, if it shall have reasonable grounds
to believe that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section and to the provisions of
the TIA.
(i) In no event shall the Trustee be required to perform, or be
responsible for the manner of performance of, any of the obligations of the
Servicer or any other party under the Sale and Servicing Agreement, except
that The Chase Manhattan Bank, solely in its capacity as Backup Servicer,
shall perform and be responsible for such obligations during such time, if
any, as the Backup Servicer shall be the successor to, and be vested with the
rights, powers, duties and privileges of, the Servicer in accordance with the
terms of the Sale and Servicing Agreement.
(j) The Indenture Trustee shall, and hereby agrees that it will, hold
the Policy in trust, and will hold any proceeds of any claim on the Policy in
trust solely for the use and benefit of the Noteholders. The Indenture
Trustee will deliver to the Rating Agency notice of any change made to the
Policy.
For purposes of this Section 6.01 and Section 8.03(c), the Indenture
Trustee, or a Responsible Officer thereof, shall be charged with actual
knowledge of any default or an Event of Default if a Responsible Officer
knows of such default or an Event of Default or the Indenture Trustee
receives written notice of such default or Event of Default from the Issuer,
the Servicer, the Backup Servicer, the Note Insurer or Noteholders owning
Notes aggregating not less than 10% of the Outstanding Amount of the Notes.
Notwithstanding the foregoing, the Indenture Trustee shall not be required to
take notice and in the absence of such actual notice and knowledge, the
Indenture Trustee may conclusively assume that there is no such default or
Event of Default.
Section 6.02. Rights of Indenture Trustee.
---------------------------
(a) The Indenture Trustee may conclusively rely on the face value of
any document believed by it to be genuine and to have been signed or
presented by the proper person. The Indenture Trustee need not investigate
any fact or matter stated in the document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel from the
appropriate party. The Indenture Trustee shall not be liable for any action
it takes or omits to take in good faith in reliance on an Officer's
Certificate or Opinion of Counsel from the appropriate party.
The right of the Indenture Trustee to perform any discretionary act
enumerated in this Indenture or in any Basic Document shall not be construed
as a duty of the Indenture Trustee and the Indenture Trustee shall not be
answerable for other than its negligence or willful misconduct in the
performance of such discretionary act.
(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee appointed with due care by it
hereunder.
(d) The Indenture Trustee shall not be liable for any action it takes
or omits to take in good faith that it believes to be authorized or within
its rights or powers; provided, that the Indenture Trustee's conduct does not
constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult, at the Issuer's expense and paid
in the priority set forth in Section 5.06(b) of the Sale and Servicing
Agreement, with counsel, and the written advice or opinion of counsel with
respect to legal matters relating to this Indenture and the Notes shall be
full and complete authorization and protection from liability in respect to
any action taken, omitted or suffered by it hereunder in good faith and in
accordance with the advice or opinion of such counsel.
(f) In the event that the Indenture Trustee is also acting as Paying
Agent, Note Registrar or collateral agent, the rights and protections
afforded to the Indenture Trustee pursuant to this Article 6 shall be
afforded to such Paying Agent, Note Registrar or collateral agent.
Section 6.03. Individual Rights of Indenture Trustee. The Indenture
--------------------------------------
Trustee in its individual or any other capacity may become the owner or
pledgee of Notes and may otherwise deal with the Issuer or its Affiliates
with the same rights it would have if it were not Indenture Trustee. Any
Paying Agent, Note Registrar, co-registrar or co-paying agent may do the same
with like rights. However, the Indenture Trustee must comply with Sections
6.11 and 6.12.
Section 6.04. Indenture Trustee's Disclaimer. The Indenture Trustee
------------------------------
shall not be responsible for and makes no representation as to the validity
or adequacy of this Indenture or the Notes, it shall not be accountable for
the Issuer's use of the proceeds from the Notes, and it shall not be
responsible for any statement of the Issuer in the Indenture or in any
document issued in connection with the sale of the Notes or in the Notes
other than the Indenture Trustee's certificate of authentication.
Section 6.05. Notice of Defaults. If a Default occurs and if it is
------------------
known to a Responsible Officer of the Indenture Trustee, the Indenture
Trustee shall mail to each Noteholder notice of the Default within 30 days
after it occurs and to the Note Insurer notice of such Default promptly after
it occurs. Except in the case of a Default in payment of principal of or
interest on any Note (including payments pursuant to the mandatory redemption
provisions of such Note), the Indenture Trustee may withhold the notice to
Noteholders if and so long as a committee of its Responsible Officers in good
faith determines that withholding the notice is in the interests of
Noteholders.
Section 6.06. Reports by Indenture Trustee to Holders. The Indenture
---------------------------------------
Trustee shall deliver to each Noteholder such information as may be required
to enable such holder to prepare its federal and state income tax returns.
Section 6.07. Compensation and Indemnity. The Issuer shall cause the
--------------------------
payment to the Indenture Trustee from time to time reasonable compensation
for its services to the extent of and in the priority set forth in Section
5.06(b) of the Sale and Servicing Agreement and as outlined in the Fee
Letter. The Indenture Trustee's compensation shall not be limited by any law
on compensation of a trustee of an express trust. The Issuer shall cause the
reimbursement to the Indenture Trustee for all reasonable out-of-pocket
expenses incurred or made by it, including costs of collection, in addition
to the compensation for its services out of the Trust to the extent of and in
accordance with the priority in Section 5.06(b) of the Sale and Servicing
Agreement. Such expenses shall include the reasonable compensation and
expenses, disbursements and advances of the Indenture Trustee's agents,
counsel, accountants and experts. Notwithstanding anything in the Basic
Documents to the contrary, but subject to Section 6.01, the Indenture Trustee
shall not be required to incur any legal fees if in its sole judgment the
Indenture Trustee shall not have adequate indemnity or assurance of suitably
prompt reimbursement; provided, however that prior to such occurrence the
Indenture Trustee shall consult with the Note Insurer. The Trust shall
indemnify the Indenture Trustee against any and all loss, liability or
expense (including attorneys' fees and expenses) incurred by it in connection
with the administration of this trust and the performance of its duties
hereunder or under the Sale and Servicing Agreement to the extent of and in
accordance with the priority in Section 5.06(b) of the Sale and Servicing
Agreement. The Indenture Trustee shall notify the Issuer and the Note
Insurer promptly of any claim for which it may seek indemnity. Failure by
the Indenture Trustee to so notify the Issuer shall not relieve the Issuer of
its obligations hereunder. The Issuer shall not reimburse any expense or
indemnify against any loss, liability or expense incurred by the Indenture
Trustee through the Indenture Trustee's own willful misconduct, negligence or
bad faith.
The Issuer's payment obligations and indemnities to the Indenture
Trustee pursuant to this Section shall survive the discharge of this
Indenture or the earlier resignation or removal of the Indenture Trustee.
When the Indenture Trustee incurs expenses after the occurrence of a Default
specified in Section 5.01(v) or (vi) with respect to the Issuer, the expenses
are intended to constitute expenses of administration under Title 11 of the
United States Code or any other applicable federal or state bankruptcy,
insolvency or similar law.
Section 6.08. Replacement of Indenture Trustee. No resignation or
--------------------------------
removal of the Indenture Trustee and no appointment of a successor Indenture
Trustee shall become effective until the acceptance of appointment by the
successor Indenture Trustee pursuant to this Section 6.08. The Indenture
Trustee may resign at any time by so notifying the Issuer, each Rating Agency
and (if the Note Insurer is the Controlling Party) the Note Insurer. The
Note Insurer or the Holders of a majority in Outstanding Amount of the Notes
may, with the consent of the Controlling Party, remove the Indenture Trustee
by so notifying the Indenture Trustee and may appoint a successor Indenture
Trustee acceptable to the Note Insurer. The Issuer shall, with the consent
of the Controlling Party, and at the request of the Controlling Party, remove
the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.11;
(ii) the Indenture Trustee is adjudged a bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the
Indenture Trustee or its property;
(iv) the Indenture Trustee otherwise becomes incapable of acting;
or
(v) the Indenture Trustee breaches any representation, warranty
or covenant made by it under any Basic Document.
If the Indenture Trustee resigns or is removed or if a vacancy exists in the
office of Indenture Trustee for any reason (the Indenture Trustee in such
event being referred to herein as the retiring Indenture Trustee), the Note
insurer may and if it fails to, the Issuer shall promptly appoint a successor
Indenture Trustee acceptable (if the Note Insurer is the Controlling Party)
to the Note Insurer.
A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee, the Note Insurer and to the
Issuer. Thereupon the resignation or removal of the retiring Indenture
Trustee shall become effective, and the successor Indenture Trustee shall
have all the rights, powers and duties of the Indenture Trustee under this
Indenture. The retiring Indenture Trustee shall be paid all amounts owed to
it upon its resignation or removal. The successor Indenture Trustee shall
mail a notice of its succession to Noteholders. The retiring Indenture
Trustee shall promptly transfer all property held by it as Indenture Trustee
to the successor Indenture Trustee. The retiring Indenture Trustee shall not
be liable for the acts or omissions of any Successor Indenture Trustee
acceptable to the Note Insurer.
If a successor Indenture Trustee does not take office within 60 days
after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Note Insurer (if the Note Insurer is the Controlling
Party), the Issuer or the Holders of a majority in Outstanding Amount of the
Notes may petition any court of competent jurisdiction for the appointment of
a successor Indenture Trustee acceptable to the Note Insurer.
If the Indenture Trustee fails to comply with Section 6.11, any
Noteholder with the prior written consent of the Note Insurer, may petition
any court of competent jurisdiction for the removal of the Indenture Trustee
and the appointment of a successor Indenture Trustee acceptable to the Note
Insurer.
Notwithstanding the replacement of the Indenture Trustee pursuant to
this Section, the Issuer's and the Administrator's obligations under
Section 6.07 shall continue for the benefit of the retiring Indenture
Trustee.
Section 6.09. Successor Indenture Trustee by Merger. If the Indenture
-------------------------------------
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation without any further act shall be the successor Indenture Trustee;
provided, that such corporation or banking association shall be acceptable to
the Note Insurer and otherwise qualified and eligible under Section 6.11.
The Indenture Trustee shall provide the Note Insurer and the Rating Agencies
prior written notice of any such transaction.
In case at the time such successor or successors by merger, conversion
or consolidation to the Indenture Trustee shall succeed to the trusts created
by this Indenture any of the Notes shall have been authenticated but not
delivered, any such successor to the Indenture Trustee may adopt the
certificate of authentication of any predecessor trustee and deliver such
Notes so authenticated; and in case at that time any of the Notes shall not
have been authenticated, any successor to the Indenture Trustee may
authenticate such Notes either in the name of any predecessor hereunder or in
the name of the successor to the Indenture Trustee; and in all such cases
such certificates shall have the full force that it is anywhere in the Notes
or in this Indenture provided that the certificate of the Indenture Trustee
shall have.
Section 6.10. Appointment of Co-Indenture Trustee or Separate Indenture
---------------------------------------------------------
Trustee.
-------
(a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Trust Estate may at the time be located, the Indenture
Trustee, with the consent of the Note Insurer (if the Note Insurer is the
Controlling Party), shall have the power and may execute and deliver all
instruments to appoint one or more Persons to act as a co-trustee or
co-trustees, or separate trustee or separate trustees, of all or any part of
the Trust, and to vest in such Person or Persons, in such capacity and for
the benefit of the Noteholders and the Note Insurer, such title to the Trust
Estate, or any part thereof, and, subject to the other provisions of this
Section, such powers, duties, obligations, rights and trusts as the Indenture
Trustee or the Note Insurer may consider necessary or desirable. No
co-trustee or separate trustee hereunder shall be required to meet the terms
of eligibility as a successor trustee under Section 6.11 and no notice to
Noteholders of the appointment of any co-trustee or separate trustee shall be
required under Section 6.08 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions
and conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed upon
and exercised or performed by the Indenture Trustee and such separate
trustee or co-trustee jointly (it being understood that such separate
trustee or co-trustee is not authorized to act separately without the
Indenture Trustee joining in such act), except to the extent that under
any law of any jurisdiction in which any particular act or acts are to
be performed the Indenture Trustee shall be incompetent or unqualified
to perform such act or acts, in which event such rights, powers, duties
and obligations (including the holding of title to the Trust Estate or
any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at
the direction of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the resignation
of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article VI. Each separate trustee and co-trustee,
upon its acceptance of the trusts conferred, shall be vested with the estates
or property specified in its instrument of appointment, either jointly with
the Indenture Trustee or separately, as may be provided therein, subject to
all the provisions of this Indenture, specifically including every provision
of this Indenture relating to the conduct of, affecting the liability of, or
affording protection to, the Indenture Trustee. Every such instrument shall
be filed with the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee, its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or
in respect of this Agreement on its behalf and in its name. If any separate
trustee or co-trustee shall die, become incapable of acting, resign or be
removed, all of its estates, properties, rights, remedies and trusts shall
vest in and be exercised by the Indenture Trustee, to the extent permitted by
law, without the appointment of a new or successor trustee.
Section 6.11. Eligibility; Disqualification. The Indenture Trustee
-----------------------------
shall at all times satisfy the requirements of TIA Section 310(a). The
Indenture Trustee shall be acceptable to the Note Insurer and shall have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition, and the time deposits of the
Indenture Trustee shall be rated at least A-1 by Standard & Poor's and P-1 by
Moody's. At any time that the Note Insurer is the Controlling Party, the
Indenture Trustee shall provide copies of such reports to the Note Insurer
upon request. The Indenture Trustee shall comply with TIA Section 310(b),
including the optional provision permitted by the second sentence of TIA
Section 310(b)(9); provided, however, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which
other securities of the Issuer are outstanding if the requirements for such
exclusion set forth in TIA Section 310(b)(1) are met.
Section 6.12. Pennsylvania Motor Vehicle Sales Finance Act Licenses.
-----------------------------------------------------
The Administrator shall use its best efforts to maintain the effectiveness of
all licenses required under the Pennsylvania Motor Vehicle Sales Finance Act
in connection with this Indenture and the transactions contemplated hereby
until the lien and security interest of this Indenture shall no longer be in
effect in accordance with the terms hereof.
Section 6.13. Preferential Collection of Claims Against Issuer. The
------------------------------------------------
Indenture Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). An Indenture Trustee who
has resigned or been removed shall be subject to TIA Section 311(a) to the
extent indicated.
Section 6.14. Waiver of Setoffs. The Indenture Trustee hereby
-----------------
expressly waives any and all rights of setoff that the Indenture Trustee may
otherwise at any time have under applicable law with respect to any Trust
Account and agrees that amounts in the Trust Accounts shall at all times be
held and applied solely in accordance with the provisions hereof and of the
other Basic Documents.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
Section 7.01. Issuer To Furnish Indenture Trustee Names and Addresses
-------------------------------------------------------
of Noteholders. The Issuer will furnish or cause to be furnished to the
--------------
Indenture Trustee (a) not more than five days after the earlier of (i) each
Record Date and (ii) three months after the last Record Date, a list, in such
form as the Indenture Trustee may reasonably require, of the names and
addresses of the Holders of Notes as of such Record Date, and (b) at such
other times as the Indenture Trustee may request in writing, within 30 days
after receipt by the Issuer of any such request, a list of similar form and
content as of a date not more than 10 days prior to the time such list is
furnished; provided, however, that so long as the Indenture Trustee is the
Note Registrar, no such list shall be required to be furnished. The
Indenture Trustee or, if the Indenture Trustee is not the Note Registrar, the
Issuer shall furnish to the Note Insurer (if the Note Insurer is the
Controlling Party) in writing on an annual basis and at such other times as
the Note Insurer may request a copy of the list of Noteholders.
Section 7.02. Preservation of Information; Communications to
----------------------------------------------
Noteholders.
-----------
(a) The Indenture Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Holders of Notes
contained in the most recent list furnished to the Indenture Trustee as
provided in Section 7.01 and the names and addresses of Holders of Notes
received by the Indenture Trustee in its capacity as Note Registrar. The
Indenture Trustee may destroy any list furnished to it as provided in such
Section 7.01 upon receipt of a new list so furnished. The Indenture Trustee
shall make such list available to the Note Insurer (if the Note Insurer is
the Controlling Party) and the Owner Trustee on request, and to the
Noteholders upon written request of three or more Noteholders or one or more
Noteholders evidencing not less than 25% of the Outstanding Amount of the
Notes.
(b) Noteholders may communicate pursuant to TIA Section 312(b) with
other Noteholders with respect to their rights under this Indenture or under
the Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall have
the protection of TIA Section 312(c).
Section 7.03. Reports by Issuer.
-----------------
(a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after the
Issuer is required (if at all) to file the same with the Commission,
copies of the annual reports and of the information, documents and other
reports (or copies of such portions of any of the foregoing as the
Commission may from time to time by rules and regulations prescribe)
that the Issuer may be required to file with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act;
(ii) file with the Indenture Trustee and the Commission in
accordance with rules and regulations prescribed from time to time by
the Commission such additional information, documents and reports with
respect to compliance by the Issuer with the conditions and covenants of
this Indenture as may be required from time to time by such rules and
regulations; and
(iii) supply to the Indenture Trustee (and the Indenture
Trustee shall transmit by mail to all Noteholders described in TIA
Section 313(c)) such summaries of any information, documents and reports
required to be filed by the Issuer pursuant to clauses (i) and (ii) of
this Section 7.03(a) and by rules and regulations prescribed from time
to time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on December 31 of each year.
Section 7.04. Reports by Indenture Trustee. If required by TIA
----------------------------
Section 313(a), within 60 days after each June 1 beginning with June 1, 1998,
the Indenture Trustee shall mail to each Noteholder as required by TIA
Section 313(c) a brief report dated as of such date that complies with TIA
Section 313(a). The Indenture Trustee also shall comply with TIA
Section 313(b).
A copy of each report at the time of its mailing to Noteholders shall be
filed by the Indenture Trustee with the Commission and each stock exchange,
if any, on which the Notes are listed. The Issuer shall notify the Indenture
Trustee if and when the Notes are listed on any stock exchange.
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 8.01. Collection of Money. Except as otherwise expressly
-------------------
provided herein, the Indenture Trustee may demand payment or delivery of, and
shall receive and collect, directly and without intervention or assistance of
any fiscal agent or other intermediary, all money and other property payable
to or receivable by the Indenture Trustee pursuant to this Indenture. The
Indenture Trustee shall apply all such money received by it as provided in
this Indenture. Except as otherwise expressly provided in this Indenture, if
any default occurs in the making of any payment or performance under any
agreement or instrument that is part of the Trust Estate, the Indenture
Trustee may take such action as may be appropriate to enforce such payment or
performance, including the institution and prosecution of appropriate
Proceedings. Any such action shall be without prejudice to any right to
claim a Default or Event of Default under this Indenture and any right to
proceed thereafter as provided in Article V.
Section 8.02. Trust Accounts.
--------------
(a) On or prior to the Closing Date, the Issuer shall establish or
cause to be established, in the name of the Indenture Trustee, for the
benefit of the Noteholders and the Note Insurer, the Trust Accounts as
provided in Section 5.02 of the Sale and Servicing Agreement.
(b) On or before each Distribution Date, the Total Distribution Amount
with respect to the related Collection Period will be deposited into the
Collection Account as provided in Section 5.02 of the Sale and Servicing
Agreement. On or before each Distribution Date, all amounts required to be
deposited in the Note Distribution Account with respect to the related
Collection Period pursuant to Section 5.06 of the Sale and Servicing
Agreement will be transferred from the Collection Account, the Reserve
Account, the Capitalized Interest Account, the Pre-Funding Account and the
Yield Maintenance Account to the Note Distribution Account.
(c) On each Distribution Date and Redemption Date, the Indenture
Trustee shall distribute all amounts on deposit in the Note Distribution
Account to Noteholders in respect of the Notes to the extent of amounts due
and unpaid on the Notes in respect of principal and interest (including any
premium) in the following amounts and in the following order of priority
(except as otherwise provided in Section 5.04(b)):
(i) to the Holders of each Class of Notes, accrued and unpaid
interest on the Outstanding Amount of the such Class at the related
Interest Rate;
(ii) on the Mandatory Redemption Date, to the Holders of each
Class of Notes in reduction of the Outstanding Amount of such Class,
pursuant to Section 5.14(b) of the Sale and Servicing Agreement, the
amounts allocated thereto, if any, from the amount withdrawn from the
Pre-Funding Account and deposited in the Note Distribution Account;
(iii) to the Holders of the Class A-1 Notes on account of
principal until the Outstanding Amount of the Class A-1 Notes is reduced
to zero; and
(iv) to the Holders of the Class A-2 Notes on account of
principal until the Outstanding Amount of the Class A-2 Notes is reduced
to zero.
Section 8.03. General Provisions Regarding Accounts.
-------------------------------------
Subject to Section 6.01(c), the Indenture Trustee shall not in any
way be held liable by reason of any insufficiency in any of the Trust
Accounts resulting from any loss on any Eligible Investment included therein
except for losses attributable to the Indenture Trustee's failure to make
payments on such Eligible Investments issued by the Indenture Trustee, in its
commercial capacity as principal obligor and not as trustee, in accordance
with their terms.
Section 8.04. Release of Trust Estate. Subject to the payment of its
-----------------------
fees and expenses pursuant to Section 6.07, the Indenture Trustee may, and
when required by the provisions of this Indenture shall, execute instruments
to release property from the lien of this Indenture, or convey the Indenture
Trustee's interest in the same, in a manner and under circumstances that are
not inconsistent with the provisions of this Indenture. No party relying
upon an instrument executed by the Indenture Trustee as provided in this
Article VIII shall be bound to ascertain the Indenture Trustee's authority,
inquire into the satisfaction of any conditions precedent or see to the
application of any moneys.
(a) The Indenture Trustee shall, at such time as there are no Notes
Outstanding and all sums due the Indenture Trustee pursuant to Section 6.07
have been paid in full and all amounts due to the Note Insurer under the
Basic Documents have been paid, release any remaining portion of the Trust
Estate that secured the Notes from the lien of this Indenture and release to
the Issuer or any other Person entitled thereto any funds then on deposit in
the Trust Accounts. The Indenture Trustee shall release property from the
lien of this Indenture pursuant to this Section 8.04(b) only upon receipt by
it and the Note Insurer of an Issuer Request accompanied by an Officer's
Certificate, an Opinion of Counsel and (if required by the TIA) Independent
Certificates in accordance with TIA SectionSection 314(c) and 314(d)(1)
meeting the applicable requirements of Section 11.01.
The Issuer agrees, upon request by the Servicer and representation by
the Servicer that it has complied with the procedure in Section 9.01 of the
Sale and Servicing Agreement, to render the Issuer Request to the Indenture
Trustee in accordance with Section 4.04, and take such other actions as are
required in that Section.
Section 8.05. Opinion of Counsel. The Indenture Trustee and the Note
------------------
Insurer shall receive at least seven days prior written notice when requested
by the Issuer to take any action pursuant to Section 8.04(b), accompanied by
copies of any instruments involved, and the Indenture Trustee and the Note
Insurer shall also require, as a condition to such action, an Opinion of
Counsel, in form and substance satisfactory to the Indenture Trustee and the
Note Insurer, stating the legal effect of any such action, outlining the
steps required to complete the same, and concluding that all conditions
precedent to the taking of such action have been complied with and such
action will not materially and adversely impair the security for the Notes or
the rights of the Noteholders in contravention of the provisions of this
Indenture; provided, however, that such Opinion of Counsel shall not be
required to express an opinion as to the fair value of the Trust Estate.
Counsel rendering any such opinion may rely, without independent
investigation, on the accuracy and validity of any certificate or other
instrument delivered to the Indenture Trustee in connection with any such
action.
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures Without Consent of Noteholders.
------------------------------------------------------
(a) Without the consent of the Holders of any Notes but with the
consent of the Note Insurer and prior written notice to the Rating Agencies
(with copy to the Indenture Trustee), the Issuer and the Indenture Trustee,
when authorized by an Issuer Order, at any time and from time to time, may
enter into one or more supplemental indentures hereto (which shall conform to
the provisions of the Trust Indenture Act as in force at the date of the
execution thereof), in form satisfactory to the Indenture Trustee, for any of
the following purposes:
(i) to correct or amplify the description of any property at any
time subject to the lien of this Indenture, or better to assure, convey
and confirm unto the Indenture Trustee any property subject or required
to be subjected to the lien of this Indenture, or to subject to the lien
of this Indenture additional property;
(ii) to evidence the succession, in compliance with the
applicable provisions hereof, of another person to the Issuer, and the
assumption by any such successor of the covenants of the Issuer herein
and in the Notes contained;
(iii) to add to the covenants of the Issuer, for the benefit of
the Holders of the Notes and the Note Insurer, or to surrender any right
or power herein conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any property
to or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any
provision herein or in any supplemental indenture that may be
inconsistent with any other provision herein or in any supplemental
indenture or to make any other provisions with respect to matters or
questions arising under this Indenture or in any supplemental indenture;
provided, that such action shall not adversely affect the interests of
the Holders of the Notes;
(vi) to evidence and provide for the acceptance of the
appointment hereunder by a successor trustee with respect to the Notes
and to add to or change any of the provisions of this Indenture as shall
be necessary to facilitate the administration of the trusts hereunder by
more than one trustee, pursuant to the requirements of Article VI; or
(vii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or under any similar
federal statute hereafter enacted and to add to this Indenture such
other provisions as may be expressly required by the TIA.
The Indenture Trustee is hereby authorized to join in the execution of any
such supplemental indenture and to make any further appropriate agreements
and stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an Issuer
Order, may, also without the consent of any of the Holders of the Notes but
with the consent of the Note Insurer and prior notice to the Rating Agencies,
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to, or changing in any manner or eliminating any of the
provisions of, this Indenture or of modifying in any manner the rights of the
Holders of the Notes under this Indenture; provided, however, that such
action shall not, as evidenced by an Opinion of Counsel, adversely affect in
any material respect the interests of any Noteholder (including the interests
of the Note Insurer to the extent it is, or will become, upon payment in full
of all amounts due to any other Noteholder hereunder or pursuant to a Note, a
Noteholder pursuant to Section 2.08(c) or Section 5.12 or the Sale and
Servicing Agreement).
Section 9.02. Supplemental Indentures with Consent of Noteholders. The
Issuer and the Indenture Trustee, when authorized by an Issuer Order, also---
------------------------------------------------ may, with prior notice to
the Rating Agencies and with the consent of (i) the Note Insurer and (ii) of
the Holders of not less than a majority of the Outstanding Amount of the
Notes, by Act of such Holders delivered to the Issuer and the Indenture
Trustee, enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to, or changing in any manner or eliminating
any of the provisions of, this Indenture or of modifying in any manner the
rights of the Holders of the Notes under this Indenture; provided, however,
that no such supplemental indenture shall, without the consent of the Holder
of each Outstanding Note affected thereby:
(i) change the date of payment of any installment of principal
of or interest on any Note, or reduce the principal amount thereof, the
interest rate thereon or the Redemption Price with respect thereto,
change the provisions of this Indenture relating to the application of
collections on, or the proceeds of the sale of, the Trust Estate to
payment of principal of or interest on the Notes, or change any place of
payment where, or the coin or currency in which, any Note or the
interest thereon is payable, or impair the right to institute suit for
the enforcement of the provisions of this Indenture requiring the
application of funds available therefor, as provided in Article V, to
the payment of any such amount due on the Notes on or after the
respective due dates thereof (or, in the case of redemption, on or after
the Redemption Date);
(ii) reduce the percentage of the Outstanding Amount of the
Notes, the consent of the Holders of which is required for any such
supplemental indenture, or the consent of the Holders of which is
required for any waiver of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences provided
for in this Indenture;
(iii) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
(iv) reduce the percentage of the Outstanding Amount of the Notes
required to direct the Indenture Trustee to direct the Issuer to sell or
liquidate the Trust Estate pursuant to Section 5.04;
(v) modify any provision of this Section except to increase any
percentage specified herein or to provide that certain additional
provisions of this Indenture or the Basic Documents cannot be modified
or waived without the consent of the Holder of each Outstanding Note
affected thereby;
(vi) modify any of the provisions of this Indenture in such
manner as to affect the calculation of the amount of any payment of
interest or principal due on any Note on any Distribution Date
(including the calculation of any of the individual components of such
calculation) or to affect the rights of the Holders of Notes to the
benefit of any provisions for the mandatory redemption of the Notes
contained herein; or
(vii) permit the creation of any lien ranking prior to or on a
parity with the lien of this Indenture with respect to any part of the
Trust Estate or, except as otherwise permitted or contemplated herein,
terminate the lien of this Indenture on any property at any time subject
hereto or deprive the Holder of any Note of the security provided by the
lien of this Indenture.
The Indenture Trustee may in its discretion or at the advice of counsel
determine whether or not any Notes would be affected by any supplemental
indenture and any such determination shall be conclusive upon the Holders of
all Notes, whether theretofore or thereafter authenticated and delivered
hereunder. The Indenture Trustee shall not be liable for any such
determination made in good faith.
It shall not be necessary for any Act of Noteholders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Issuer and the Indenture Trustee of
any supplemental indenture pursuant to this Section, the Indenture Trustee
shall mail to the Holders of the Notes to which such amendment or
supplemental indenture relates a notice setting forth in general terms the
substance of such supplemental indenture. Any failure of the Indenture
Trustee to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such supplemental indenture.
Section 9.03. Execution of Supplemental Indentures. In executing, or
------------------------------------
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modification thereby of the trusts
created by this Indenture, the Indenture Trustee shall be entitled to
receive, and subject to Sections 6.01 and 6.02, shall be fully protected in
relying upon, an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture. The
Indenture Trustee may, but shall not be obligated to, enter into any such
supplemental indenture that affects the Indenture Trustee's own rights,
duties, liabilities or immunities under this Indenture or otherwise. The
Indenture Trustee shall provide a fully executed copy of any supplemental
indentures to this Indenture to the Note Insurer and each Rating Agency.
Section 9.04. Effect of Supplemental Indenture. Upon the execution of
--------------------------------
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and shall be deemed to be modified and amended in accordance
therewith with respect to the Notes affected thereby, and the respective
rights, limitations of rights, obligations, duties, liabilities and
immunities under this Indenture of the Indenture Trustee, the Issuer and the
Holders of the Notes shall thereafter be determined, exercised and enforced
hereunder subject in all respects to such modifications and amendments, and
all the terms and conditions of any such supplemental indenture shall be and
be deemed to be part of the terms and conditions of this Indenture for any
and all purposes.
Section 9.05. Reference in Notes to Supplemental Indentures. Notes
---------------------------------------------
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee
shall, bear a notation in form approved by the Indenture Trustee and the Note
Insurer as to any matter provided for in such supplemental indenture. If the
Issuer or the Indenture Trustee shall so determine, new Notes so modified as
to conform, in the opinion of the Indenture Trustee and the Issuer, to any
such supplemental indenture may be prepared and executed by the Issuer and
authenticated and delivered by the Indenture Trustee in exchange for
Outstanding Notes.
Section 9.06. Conformity with Trust Indenture Act. Every amendment of
-----------------------------------
this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as
then in effect so long as this Indenture shall then be qualified under the
Trust Indenture Act.
ARTICLE X
REDEMPTION OF NOTES
Section 10.01. Redemption.
----------
(a) The Class A-2 Notes are subject to redemption in whole, but not in
part, at the direction of the Servicer or the Note Insurer, as the case may
be, pursuant to Section 9.01 of the Sale and Servicing Agreement, on any
Distribution Date on which the Servicer or the Note Insurer, as the case may
be, exercises its option to purchase the Trust Estate pursuant to said
Section 9.01, for a purchase price equal to the Redemption Price plus all
amounts due to the Note Insurer under the Basic Documents; provided, that the
Issuer has available funds sufficient to pay the Redemption Price plus all
amounts due to the Note Insurer under the Basic Documents. The Servicer or
the Issuer shall furnish the Note Insurer and the Rating Agencies and the
Indenture Trustee notice of such redemption. If the Class A-2 Notes are to
be redeemed pursuant to this Section 10.01(a), the Servicer or the Note
Insurer, as the case may be, shall furnish notice of such election to the
Indenture Trustee not later than 20 days prior to the Redemption Date and
shall deposit by 10:00 A.M. New York City time on the Redemption Date with
the Indenture Trustee in the Note Distribution Account the Redemption Price
of the Class A-2 Notes to be redeemed and shall pay to the Note Insurer all
amounts due to it under the Basic Documents, whereupon all such Class A-2
Notes shall be due and payable on the Redemption Date upon the furnishing of
a notice complying with Section 10.02 to each Holder of the Notes.
(b) (Reserved.)
(c) If the Pre-Funded Amount has not been reduced to zero at the end of
the Funding Period after giving effect to any reductions on such day pursuant
to Section 5.14(a) of the Sale and Servicing Agreement, one or more classes
of Notes then Outstanding will be redeemed in part, as described in
Section 8.02(c)(ii).
Section 10.02. Form of Redemption Notice.
-------------------------
Notice of redemption under Section 10.01(a) shall be given by the
Indenture Trustee by first-class mail, postage prepaid, or by facsimile
mailed or transmitted not later than 10 days prior to the applicable
Redemption Date to the Note Insurer and each Holder of Notes, as of the close
of business on the Record Date preceding the applicable Redemption Date, at
such Holder's address or facsimile number appearing in the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the place where such Notes are to be surrendered for payment
of the Redemption Price (which shall be the office or agency of the
Issuer to be maintained as provided in Section 3.02); and
(iv) that interest on the Notes shall cease to accrue on the
Redemption Date.
Notice of redemption of the Notes shall be given by the Indenture Trustee in
the name and at the expense of the Issuer. Failure to give notice of
redemption, or any defect therein, to any Holder of any Note shall not impair
or affect the validity of the redemption of any other Note.
Section 10.03. Notes Payable on Redemption Date. The Notes or portions
--------------------------------
thereof to be redeemed shall, following notice of redemption as required by
Section 10.02 (in the case of redemption pursuant to Section 10.01(a)), on
the Redemption Date become due and payable at the Redemption Price and
(unless the Issuer shall default in the payment of the Redemption Price) no
interest shall accrue on the Redemption Price for any period after the date
to which accrued interest is calculated for purposes of calculating the
Redemption Price.
ARTICLE XI
MISCELLANEOUS
Section 11.01. Compliance Certificates and Opinions, etc.
-----------------------------------------
(a) Upon any application or request by the Issuer to the Indenture
Trustee to take any action under any provision of this Indenture, the Issuer
shall furnish to the Indenture Trustee and the Note Insurer (i) an Officer's
Certificate stating that all conditions precedent, if any, provided for in
this Indenture relating to the proposed action have been complied with and
(ii) an Opinion of Counsel stating that in the opinion of such counsel all
such conditions precedent, if any, have been complied with and (iii) (if
required by the TIA) an Independent Certificate from a firm of certified
public accountants meeting the applicable requirements of this Section,
except that, in the case of any such application or request as to which the
furnishing of such documents is specifically required by any provision of
this Indenture, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate or opinion
has read or has caused to be read such covenant or condition and the
definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory,
such signatory has made such examination or investigation as is
necessary to enable such signatory to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
(b) (i) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made the basis for
the release of any property or securities subject to the lien of this
Indenture, the Issuer shall, in addition to any obligation imposed in
Section 11.01(a) or elsewhere in this Indenture, furnish to the
Indenture Trustee and the Note Insurer (if the Note Insurer is the
Controlling Party) an Officer's Certificate certifying or stating the
opinion of each person signing such certificate as to the fair value
(within 90 days of such deposit) to the Issuer of the Collateral or
other property or securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the Indenture
Trustee and the Note Insurer an Officer's Certificate certifying or
stating the opinion of any signer thereof as to the matters described in
clause (i) above, the Issuer shall also deliver to the Indenture Trustee
and the Note Insurer an Independent Certificate as to the same matters,
if the fair value to the Issuer of the securities to be so deposited and
of all other such securities made the basis of any such withdrawal or
release since the commencement of the then-current fiscal year of the
Issuer, as set forth in the certificates delivered pursuant to clause
(i) above and this clause (ii), is 10% or more of the Outstanding Amount
of the Notes, but such a certificate need not be furnished with respect
to any securities so deposited, if the fair value thereof to the Issuer
as set forth in the related Officer's Certificate is less than $25,000
or less than one percent of the Outstanding Amount of the Notes.
(iii) Whenever any property or securities are to be released
from the lien of this Indenture, the Issuer shall also furnish to the
Indenture Trustee and the Note Insurer (if the Note Insurer is the
Controlling Party) an Officer's Certificate certifying or stating the
opinion of each person signing such certificate as to the fair value
(within 90 days of such release) of the property or securities proposed
to be released and stating that in the opinion of such person the
proposed release will not impair the security under this Indenture in
contravention of the provisions hereof.
(iv) Other than with respect to the release of any Purchased
Receivable, the Issuer is required to furnish to the Indenture Trustee
and the Note Insurer an Officer's Certificate certifying or stating the
opinion of any signer thereof as to the matters described in clause
(iii) above, the Issuer shall also furnish to the Indenture Trustee and
the Note Insurer an Independent Certificate as to the same matters if
the fair value of the property or securities and of all other property,
other than property as contemplated by clause (v) below, or securities
released from the lien of this Indenture since the commencement of the
then-current calendar year, as set forth in the certificates required by
clause (iii) above and this clause (iv), equals 10% or more of the
Outstanding Amount of the Notes, but such certificate need not be
furnished in the case of any release of property or securities if the
fair value thereof as set forth in the related Officer's Certificate is
less than $25,000 or less than one percent of the then Outstanding
Amount of the Notes.
(v) Notwithstanding Section 4.04 or any other provision of this
Section, the Issuer may, without compliance with the requirements of the
other provisions of this Section, (A) collect, liquidate, sell or
otherwise dispose of Receivables and Financed Vehicles as and to the
extent permitted or required by the Basic Documents and (B) make cash
payments out of the Trust Accounts as and to the extent permitted or
required by the Basic Documents.
Section 11.02. Form of Documents Delivered to Indenture Trustee. In
------------------------------------------------
any case where several matters are required to be certified by, or covered by
an opinion of, any specified Person, it is not necessary that all such
matters be certified by, or covered by the opinion of, only one such Person,
or that they be so certified or covered by only one document, but one such
Person may certify or give an opinion with respect to some matters and one or
more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which such officer's
certificate or opinion is based are erroneous. Any such certificate of an
Authorized Officer or Opinion of Counsel may be based, insofar as it relates
to factual matters, upon a certificate or opinion of, or representations by,
an officer or officers of the Servicer, the Seller, the Issuer or the
Administrator, stating that the information with respect to such factual
matters is in the possession of the Servicer, the Seller, the Issuer or the
Administrator, unless such counsel knows, or in the exercise of reasonable
care should know, that the certificate or opinion or representations with
respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the
Issuer shall deliver any document as a condition of the granting of such
application, or as evidence of the Issuer's compliance with any term hereof,
it is intended that the truth and accuracy, at the time of the granting of
such application or at the effective date of such certificate or report (as
the case may be), of the facts and opinions stated in such document shall in
such case be conditions precedent to the right of the Issuer to have such
application granted or to the sufficiency of such certificate or report. The
foregoing shall not, however, be construed to affect the Indenture Trustee's
right to rely upon the truth and accuracy of any statement or opinion
contained in any such document as provided in Article VI.
Section 11.03. Acts of Noteholders.
-------------------
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Noteholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Noteholders in person or by agents
duly appointed in writing; and except as herein otherwise expressly provided
such action shall become effective when such instrument or instruments are
delivered to the Indenture Trustee and, where it is hereby expressly
required, to the Issuer. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as
the "Act" of the Noteholders signing such instrument or instruments. Proof
of execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to
Section 6.01) conclusive in favor of the Indenture Trustee and the Issuer, if
made in the manner provided in this Section.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes shall bind the Holder of
every Note issued upon the registration thereof or in exchange therefor or in
lieu thereof, in respect of anything done, omitted or suffered to be done by
the Indenture Trustee or the Issuer in reliance thereon, whether or not
notation of such action is made upon such Note.
Section 11.04. Notices, etc., to Indenture Trustee, Issuer and Rating
------------------------------------------------------
Agencies. Any request, demand, authorization, direction, notice, consent,
--------
waiver or Act of Noteholders or other documents provided or permitted by this
Indenture shall be in writing and, if such request, demand, authorization,
direction, notice, consent, waiver or act of Noteholders is to be made upon,
given or furnished to or filed with:
(i) the Indenture Trustee by any Noteholder, the Note Insurer or
by the Issuer, shall be sufficient for every purpose hereunder if made,
given, furnished or filed in writing to or with the Indenture Trustee at
its Corporate Trust Office; or
(ii) the Issuer by the Indenture Trustee, the Note Insurer or by
any Noteholder, shall be sufficient for every purpose hereunder if in
writing and mailed first-class, postage prepaid to the Issuer addressed
to: Hyundai Auto Receivables Trust 1998-A, in care of Wilmington Trust
Company, as Owner Trustee, Xxxxxx Square North, 0000 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000, Attention: Corporate Trust
Administration, or at any other address previously furnished in writing
to the Indenture Trustee and the Note Insurer by the Issuer or the
Administrator. The Issuer shall promptly transmit any notice received
by it from the Noteholders to the Indenture Trustee;
(iii) the Note Insurer shall be sufficient for any purpose
hereunder if in writing and mailed by registered mail or personally
delivered or telexed or facsimiled to the Note Insurer at: MBIA
Insurance Corporation, 000 Xxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000,
Attention: IPM-SF; Facsimile No.: (000) 000-0000, Telephone No. (914)
273-4545.
Notices required to be given to the Rating Agencies by the Issuer, the
Indenture Trustee or the Owner Trustee shall be in writing, personally
delivered or mailed by certified mail, return receipt requested, to (i) in
the case of Moody's, at the following address: Xxxxx'x Investors Service,
Inc., ABS Monitoring Department, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
and (ii) in the case of Standard & Poor's, at the following address:
Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc., 00 Xxxxxxxx
(00xx Xxxxx), Xxx Xxxx, Xxx Xxxx 00000, Attention of Asset Backed
Surveillance Department; or as to each of the foregoing, at such other
address as shall be designated by written notice to the other parties.
Section 11.05. Notices to Noteholders; Waiver. Where this Indenture
------------------------------
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at such Holder's address as it appears on the Note Register, not later
than the latest date, and not earlier than the earliest date, prescribed for
the giving of such notice. In any case where notice to Noteholders is given
by mail, neither the failure to mail such notice nor any defect in any notice
so mailed to any particular Noteholder shall affect the sufficiency of such
notice with respect to other Noteholders, and any notice that is mailed in
the manner herein provided shall conclusively be presumed to have been duly
given.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a result
of a strike, work stoppage or similar activity, it shall be impractical to
mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed
to be a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies, failure
to give such notice shall not affect any other rights or obligations created
hereunder, and shall not under any circumstance constitute a Default or Event
of Default.
Section 11.06. Alternate Payment and Notice Provisions.
---------------------------------------
Notwithstanding any provision of this Indenture or any of the Notes to the
contrary, the Issuer may enter into any agreement with any Holder of a Note
providing for a method of payment, or notice by the Indenture Trustee or any
Paying Agent to such Holder, that is different from the methods provided for
in this Indenture for such payments or notices. The Issuer will furnish to
the Indenture Trustee a copy of each such agreement and the Indenture Trustee
will cause payments to be made and notices to be given in accordance with
such agreements. The Indenture Trustee shall provide a copy of any request
made pursuant to this Section 11.06 to the Owner Trustee.
Section 11.07. Effect of Headings and Table of Contents. The Article
----------------------------------------
and Section headings herein and the Table of Contents are for convenience
only and shall not affect the construction hereof.
Section 11.08. Successors and Assigns. All covenants and agreements
----------------------
in this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the Indenture
Trustee in this Indenture shall bind its successors, co-trustees and agents.
Section 11.09. Separability. In case any provision in this Indenture
------------
or in the Notes shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way
be affected or impaired thereby.
Section 11.10. Benefits of Indenture. The Note Insurer and its
---------------------
successors and assigns shall be third-party beneficiaries to the provisions
of this Indenture, and shall be entitled to rely upon and directly to enforce
the provisions of this Indenture so long as the Note Insurer is the
Controlling Party. Nothing in this Indenture or in the Notes, express or
implied, shall give to any Person, other than the parties hereto, the Note
Insurer and their successors hereunder, and the Noteholders, and any other
party secured hereunder, and any other Person with an ownership interest in
any part of the Trust Estate, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
Section 11.11. Legal Holidays. In any case where the date on which any
--------------
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the date on which nominally due, and no interest
shall accrue for the period from and after any such nominal date.
SECTION 11.12. GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 11.13. Counterparts. This Indenture may be executed in any
------------
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
Section 11.14. Recording of Indenture. If this Indenture is subject
----------------------
to recording in any appropriate public recording offices, such recording is
to be effected by the Issuer and at the expense of the Servicer accompanied
by an Opinion of Counsel (which may be counsel to the Indenture Trustee or
any other counsel reasonably acceptable to the Indenture Trustee and the Note
Insurer) to the effect that such recording is necessary either for the
protection of the Noteholders or any other Person secured hereunder or for
the enforcement of any right or remedy granted to the Indenture Trustee under
this Indenture.
Section 11.15. Trust Obligation. No recourse may be taken, directly
----------------
or indirectly, with respect to the obligations of the Issuer, the Owner
Trustee or the Indenture Trustee on the Notes or under this Indenture or any
certificate or other writing delivered in connection herewith or therewith,
against (i) the Indenture Trustee or the Owner Trustee in its individual
capacity, (ii) any owner of a beneficial interest in the Issuer, including
the Seller, or (iii) any partner, owner, beneficiary, agent, officer,
director, employee or agent of the Indenture Trustee or the Owner Trustee in
its individual capacity, any holder of a beneficial interest in the Issuer,
the Owner Trustee or the Indenture Trustee or of any successor or assign of
the Indenture Trustee or the Owner Trustee in its individual capacity, except
as any such Person may have expressly agreed (it being understood that the
Indenture Trustee and the Owner Trustee have no such obligations in their
individual capacity) and except that any such partner, owner or beneficiary
shall be fully liable, to the extent provided by applicable law, for any
unpaid consideration for stock, unpaid capital contribution or failure to pay
any installment or call owing to such entity. For all purposes of this
Indenture, in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the
benefits of, the terms and provisions of Article VI, VII and VIII of the
Trust Agreement.
Section 11.16. No Petition. The Indenture Trustee, by entering into
-----------
this Indenture, and each Noteholder, by accepting a Note, hereby covenant and
agree that they will not at any time institute against the Issuer, the
Certificate Trust or the Depositor, or join in any institution against the
Issuer, the Certificate Trust or the Depositor, of any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States federal or state bankruptcy or similar
law in connection with any obligations relating to the Notes, this Indenture
or any of the Basic Documents.
Section 11.17. Inspection. The Issuer agrees that, on reasonable prior
----------
notice, it will permit any representative of the Indenture Trustee or of the
Note Insurer (if the Note Insurer is the Controlling Party), during the
Issuer's normal business hours, to examine all the books of account, records,
reports and other papers of the Issuer, to make copies and extracts
therefrom, to cause such books to be audited by Independent certified public
accountants, and to discuss the Issuer's affairs, finances and accounts with
the Issuer's officers, employees and Independent certified public
accountants, all at such reasonable times and as often as may be reasonably
requested. The Indenture Trustee shall, and shall cause its representatives
to, hold in confidence all such information except to the extent disclosure
may be required by law (and all reasonable applications for confidential
treatment are unavailing) and except to the extent that the Indenture Trustee
may reasonably determine that such disclosure is consistent with its
obligations hereunder.
Section 11.18. Conflict with Trust Indenture Act. If any provision
---------------------------------
hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this Indenture by any of the provisions of the
Trust Indenture Act, such required provision shall control.
The provisions of TIA SectionSection 310 through 317 that impose duties
on any person (including the provisions automatically deemed included herein
unless expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.
* * * * *
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
this Indenture to be duly executed by their respective officers, thereunto
duly authorized and duly attested, all as of the day and year first above
written.
HYUNDAI AUTO RECEIVABLES TRUST 1998-A,
By: WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Owner Trustee,
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
THE CHASE MANHATTAN BANK,
not in its individual capacity but solely as
Indenture Trustee,
By: /s/ Xxxx Xxxxxx
--------------------------------------------
Name: Xxxx Xxxxxx
Title: Vice President
STATE OF NEW YORK }
} ss.:
COUNTY OF NEW YORK }
BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared Xxxxxx Xxxxxx, a Vice
President of Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee of Hyundai Auto Receivables Trust 1998-A, a Delaware Business
Trust (the "Trust") known to me to be the person and officer whose name is
subscribed to the foregoing instrument and acknowledged to me that the same was
the act of the said Trust, and that s/he executed the same as the act of said
business trust for the purpose and consideration therein expressed, and in the
capacities therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 16th day of April, 1998.
/s/ Xxxxx Xxxxxx
----------------------------------------------
Notary Public in and for the State of New York.
My commission expires:
November 17, 1999
------------------------------
STATE OF NEW YORK }
} ss.:
COUNTY OF NEW YORK }
BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared Xxxx Xxxxxx, known to me to be
the person and officer whose name is subscribed to the foregoing instrument and
acknowledged to me that the same was the act of THE CHASE MANHATTAN BANK, a New
York banking corporation, and that s/he executed the same as the act of said
corporation for the purpose and consideration therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 16th day of April, 1998.
/s/ Xxxxx Xxxxxx
-----------------------------------------------
Notary Public in and for the State of New York.
My commission expires:
November 17, 1999
------------------------------
SCHEDULE A
(To be Provided on the Closing Date and Supplemented on the Subsequent
Transfer Date)
